Silvergate Capital Corporation, the holding company for crypto-friendly bank Silvergate Bank, announced its intent to wind down operations and voluntarily liquidate the bank in an orderly manner and in accordance with applicable regulatory processes.
Silvergate said that, in light of recent industry and regulatory developments, an orderly wind down of the bank operations and a voluntary liquidation is the best path forward. The wind down and liquidation plan includes full repayment of all deposits. Silvergate is also considering how best to resolve claims and preserve the residual value of its assets, including its proprietary technology and tax assets.
Last week, Silvergate announced it would delay its annual 10-K report for the 2022 fiscal year, and decided to shut down the Silvergate Exchange Network, the bank's payments network for crypto settlement. Multiple crypto clients then stopped their relationships with Silvergate, including Coinbase, Circle, Paxos and others.
The US Senate Banking Committee Chairman Sherrod Brown said in a statement,
“As the impact of FTX's collapse continues to ripple outward, today we are seeing what can happen when a bank is overreliant on a risky, volatile sector like cryptocurrencies. I've been concerned that when banks get involved with crypto, it spreads risk across the financial system and it will be taxpayers and consumers who pay the price. That's why I am continuing to work with my colleagues in Congress and financial regulators to establish strong safeguards for our financial system from the risks of crypto.”
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Policy and Regulation
