At 4:30 p.m. Eastern Time, Silvergate Bank revealed its intent to unwind the crypto-friendly bank’s operations and willingly liquidate the business’s possessions. The news follows substantial monetary problems the bank dealt with, and the company’s stock dropped in worth.
Details of Silvergate’s Wind Down and Liquidation Plan
Over the last 6 months, Silvergate Capital Corporation’s (NYSE: SI) stock dropped 94.82% versus the U.S. dollar as the business dealt with substantial monetary problems connected to its direct exposure to the now-defunct crypto exchange FTX. On Wednesday, March 8, 2023, the business revealed it was unwinding operations and strategies to liquidate the bank. Four days back, Silvergate ceased the company’s Silvergate Exchange Network payment platform.
“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,” the business’s news release detailed. “The bank’s wind down and liquidation plan includes full repayment of all deposits. The company is also considering how best to resolve claims and preserve the residual value of its assets, including its proprietary technology and tax assets,” Silvergate’s declaration included.
Silvergate’s stock closed Wednesday at $4.91 per share after the stock shed 40.99% in USD worth over the last 5 days. Last week, it informed the U.S. Securities and Exchange Commission (SEC) that it needed to postpone its yearly financial revenues report, and the bank’s stock was reduced by banking huge JPMorgan. In the filing, Silvergate discussed its “ability to continue as a going concern,” and it also kept in mind that it dealt with regulative examination from U.S. authorities. After the stock downgrade, big crypto companies such as Circle, Crypto.com, Gemini, Paxos, and Coinbase distanced themselves from the crypto-friendly bank.
What effect will the voluntary liquidation of Silvergate Bank have on the more comprehensive cryptocurrency industry? Share your ideas about this topic in the comments area below.
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