Yesterday, Silvergate Bank stated that it would cease operations in an orderly way.
Silvergate Capital Corporation, the holding company for Silvergate Bank, declared its intention to cease all operations yesterday.
The bank announced in a press statement that it would voluntarily liquidate “in compliance with appropriate regulatory procedures” The bank said that all client deposits would be refunded in full and that it was in the process of resolving disputes and preserving the value of its assets.
Silvergate informed the Securities and Exchange Commission at the start of the month that it was perhaps “short of funds” and “reevaluating its operations.” Also, the business acknowledged uncertainty about its capacity to continue operations. Coinbase, Paxos, Circle, Galaxy Digital, and CBOE were among the first to halt transactions to and from Silvergate in response to the news.
Soon afterward, Silvergate decided to terminate the Silvergate Exchange Network (SEN), which allowed clients to trade fiat currency for cryptocurrency.
Silvergate had earlier announced a $1.05 billion loss in the fourth quarter of 2022 due to the “confidence crisis” the crypto sector suffered after FTX’s demise. But, former FDIC chair Sheila Bair told Bloomberg yesterday that “Silvergate’s problems were as much, if not more, the result of conventional banking risks—lack of diversification, maturity mismatches—than its exposure to cryptocurrencies.”
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