Silvergate Bank has announced that it would voluntarily liquidate its assets and gradually halt its operations.
The U.S.-based crypto-focused bank stated that this is the best decision for the path forward.
- Silvergate
will move on with Centerview Partners as a financial adviser; Cravath,
Swaine & Moore LLP for legal assistance; and Strategic Risk
Associates for transition management.
- Throughout the process, all deposits will be fully repaid.
- The liquidation decision came nearly one week after Silvergate notified the U.S. Securities and Exchange Commission (SEC) that it would fail to file its annual 10-K report for the 2022 fiscal year on time.
- In
the late filing notice, the bank warned that it might not survive
another 12 months since it might be less than well-capitalized.
- The crypto bank’s high losses were mainly triggered by the bankruptcy of crypto exchange FTX, which held around $1B of Silvergate deposits.
- Following
the notice, many crypto-related firms, including Coinbase, Crypto.com,
Kraken, Circle, Paxos, Bitstamp, Galaxy Digital, and LedgerX, cut ties
with Silvergate Bank.
- The bank also had to shut down the Silvergate Exchange Network (SEN) platform used by corporate customers, including Binance.US, Kraken, and Gemini, to move money to crypto exchanges 24/7.
- Silvergate began offering banking services to crypto firms in 2013, launching the SEN platform.
- It already had more than 750 crypto clients when its initial public offering (IPO) was completed in 2019 by trading on the New York Stock Exchange.
