Silvergate Capital, the bank at the center of the crisis, is finally shutting down its operations and liquidating after the market meltdown. Silvergate Bank will voluntarily liquidate its assets and wind down its operations, its holding company, Silvergate Capital Corp., said in an announcement on Wednesday.
Silvergate Capital Corporation Silvergate or Company NYSE: SI is the holding company for Silvergate Bank, and has announced in a press release that it intends to liquidate the Bank in an orderly manner and in accordance with applicable regulatory processes. The announcement came less than a week after Silvergate discontinued its payment platform, the Silvergate Exchange Network SEN. As part of the announcement, Silvergate also provided clarification that all other deposit-related services are still operational as the company winds down. If there are any changes, customers will be notified.
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 Bank's wind down and liquidation plan includes full repayment of all deposits. The Company is considering how to resolve claims and preserve the residual value of its assets, including its proprietary technology and tax assets. Before its demise, Silvergate was a central lender to the industry and was one of the two main banks for cryptocurrencies companies, along with the New York-based Signature Bank. Its stock plunged more than 36% in after-hours trading. Before the company filed for bankruptcy last year, FTX, the exchange founded by the disgraced San Bankman-Fried, was a major Silvergate customer. Silvergate has just over $11 billion in assets while Signature Bank has over $114 billion in assets.
The shutdown of Silvergate is already reverberating across the industry. The White House has commented on the story. A White House spokeswoman referred to Press Secretary Karine Jean-Pierre as saying that the presidential administration was monitoring the situation from earlier this week. Earlier this week, Karine Jean-Pierre said that President Joe Biden would continue to call on the US Congress to take action on cryptocurrencies and come up with regulations to protect them. Silvergate Capital, founded in 1988 by Derek Eisele, is a publicly traded bank holding company in La Jolla, California. It provides innovative financial infrastructure solutions and services to clients in the industry. Silvergate Capital operates through its subsidiary Silvergate Bank, a commercial bank that provides banking services to businesses in the fintech and digital currency industries. The bank offers deposit products, including interest and non-interest bearing demand deposit accounts and savings accounts, as well as cash management services, such as wire transfer services, online banking, and mobile banking. One of the key services provided by Silvergate Bank is the Silvergate Exchange Network SEN, a proprietary network that allows institutional investors and digital currency exchanges to transfer US dollars instantly between each other, 24 7 The speed and reliability of transfers made the service popular in the digital currency industry. Silvergate Capital clients included institutional investors, digital currency exchanges, and other businesses in the digital currency industry before the shutdown.