Investors Beware: Silvergate Bank to Wind Down Operations After Massive Downtrend in Shares
According to multiple reports, Silvergate Bank, which has been known for its crypto-friendly stance, has announced that it will wind down its operations and liquidate the institution due to recent events.
The bank’s shares have experienced a significant downturn as it reported a decline in liquidity and delayed its annual report.
The collapse of one of its major partners, the crypto exchange FTX, has been a significant blow to Silvergate Bank.
The FTX collapse has caused scrutiny from regulators, bankruptcies of several companies, and reputational damage to the nascent asset class. This has further impacted Silvergate Bank’s ability to operate smoothly in the market.
After weeks of speculation and concerns from investors about Silvergate’s capacity to continue operating, the bank has finally confirmed the liquidation and issued a statement saying that it believes an orderly wind-down of bank operations and a voluntary liquidation of the bank is the best path forward.
Silvergate Bank is committed to repaying all deposits to its customers, and the company has hired Centerview Partners as its financial advisor and Swaine & Moore to provide legal services.
READ MORE: Bitcoin Drops Below $22,000 as Silvergate Situation Escalates
The bank’s wind-down and liquidation plan also includes full repayment of all deposits, and the company is looking into ways to resolve claims and preserve the residual value of its assets, including its proprietary technology and tax assets.
The news of the liquidation has caused significant losses for Silvergate’s shares, which were exchanging hands at around $5 as of the time of writing. This may have unintended consequences for the emerging crypto industry as big companies in the legacy financial industry have supported the bank.
The FTX effect is expected to continue to ripple across the crypto sector, and the liquidation of Silvergate Bank may have further implications for the industry as confidence in the sector continues to wobble.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
