Silvergate Bank plans to scale back operations and liquidate March 8 Press release from the holding company, Silvergate Capital.
Silvergate closes bank
Silvergate said banking operations would be suspended in accordance with regulations.
It said the course of action would include the full repayment of all deposits. It also said it is exploring ways to settle claims and ensure the continued residual value of assets such as proprietary technology and tax assets.
The company said it made the decision in light of “recent industry and regulatory developments,” without citing specific events.
Silvergate has not disclosed whether it will file for bankruptcy.
Silvergate previously announced that it would be shutting down the Silvergate Exchange Network (SEN) while allowing other services to continue to operate. We reiterated today that other deposit-related services will remain in effect during the curtailment process.
The Silvergate crisis started with an SEC filing
On March 3, Silvergate filed with the SEC to file a 10-K filing.
In its filing, the company also said it is facing inquiries from regulators such as the U.S. Department of Justice (DOJ). As reported in February, that investigation may have to do with Silvergate’s relationship with FTX, but the filing does not fully state this.
Several major cryptocurrency companies stopped using Silvergate’s services shortly after filing (and shortly before the company announced it was shutting down its SEN service). Many of these companies have started using competing signing banks.
The mainstream media had previously reported that Silvergate was discussing recovery plans with the FDIC, but the White House has publicly said it was aware of the situation. It is unclear whether other regulators or government agencies will be involved.
Silvergate’s stock price has trended downward over the course of the incident. Silvergate (SI) is down 5.76% in value today, down 63% since March 1st.
