On Wednesday, California-based Silvergate Capital Corp., which provides lending services to many crypto firms, announced that it would cease operations and liquidate Silvergate Bank.
Silvergate made the following statement:
“In light of recent industry and regulatory developments, Silvergate believes that an orderly wind down of Bank operations and a voluntary liquidation of the Bank is the best path forward.”
Silvergate also said that it would repay all deposits. Silvergate shares traded on the NYSE fell more than 43% to $2.76 in after-hours trading.
What happened?
Due to regulatory and other business-related difficulties, Silvergate Bank announced that the company was unable to submit its Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2022, to the Securities and Exchange Commission (SEC) by March 16. Following this announcement, Silvergate stock fell 57.7% on Thursday last week, and many crypto asset platforms cut ties with the company.
Silvergate used to provide banking services to several crypto firms, including Sam Bankman-Fried’s bankrupt FTX exchange. Last month, it was reported that Silvergate was being investigated by US prosecutors over its ties to FTX and its subsidiary Alameda Research. Silvergate also reported a loss of $1B in Q4 2022.
