Silvergate to submit shutdown plan in coming days after Federal Reserve order
The Federal Reserve said: June 1 The company announced that it has issued a consent order to silvergate, a crypto-friendly bank, directing it to scale back its operations.
Must protect depositors
Silvergate Capital Corporation and Silvergate Bank have 10 days from the June 1 order to submit a closure plan to regulators. Silvergate has 10 days after he gets his supervisor’s approval to adopt the plan.
The company is regulated by the Federal Reserve Bank of San Francisco and the California Department of Financial Protection and Innovation (DFPI).
The latest order states that the Silvergate closing process must protect depositors and the deposit insurance fund. This means companies need to maintain staff, manage financial products and maintain records for the benefit of depositors.
The order said Silvergate could not undertake certain transactions or expand its business without regulatory approval. The order specifically prohibits “golden parachute” arrangements that could overcompensate new or reassigned executives.
out of time
Silvergate originally announced its voluntary self-liquidation on March 8.
The company’s troubles began a few days ago, on March 1, when Silvergate filed a late 10K form and said it was reviewing its ability to “continue as a going concern.” The news, combined with previous investigative reports, sparked a mounting mounting.
The order also notes that Silvergate began experiencing a decline in deposits in late 2022 following the FTX bankruptcy. Silvergate is cooperating with regulators by providing documentation and evidence regarding its relationship with FTX and Alameda. The order says they will continue to cooperate even after the closure.
Silvergate’s full shutdown is still pending, but one of its flagship services, the Silvergate Exchange Network (SEN), was discontinued in March.
An article first appeared on CryptoSlate stating that Silvergate will submit a closure plan within days of receiving an order from the Federal Reserve Board.
