Silvergate Bank Ordered to Return $9.85 Million to BlockFi
In accordance with a filing made on March 3rd, Silvergate Bank has been instructed to return $9.85 million to BlockFi as part of BlockFi's ongoing bankruptcy proceedings.
This results from an agreement between BlockFi and Silvergate in August 2020, where Silvergate acted as a depository institution for certain ACH transactions.
BlockFi agreed to establish a reserve containing $10 million in November 2021, with the account set to terminate 90 business days after the last transfer.
As a result, Silvergate is now required to release $9.85 million from the reserve account, while the remaining $150,000 may be held in the reserve account.
This court order is part of BlockFi’s ongoing bankruptcy proceedings, as the company filed for bankruptcy in November 2022, owing between $1 billion and $10 billion to its creditors, with over 100,000 creditors.
Although Silvergate had less than $20 million of exposure to BlockFi and was not a custodian for BlockFi’s Bitcoin-collateralized SEN Leverage loans, nor did it have any investments in BlockFi, the two companies still had a close relationship.
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This was evidenced when BlockFi referred to Silvergate as a “banking partner” on November 10th and announced the indefinite halt of withdrawals on the same day due to FTX’s separate collapse.
The court order requiring the return of funds is not related to the recent controversy surrounding Silvergate. On March 1st, Silvergate announced a delay in its 10-K filing and alluded to ongoing regulatory investigations.
This led to several major crypto companies distancing themselves from the bank, although BlockFi did not comment on this issue.
Alexander Stefanov
Reporter at CoinsPress
Alex is Editor-in-Chief of Coinspress and co-founder of Millennial Media Group, with nearly a decade of experience covering financial markets - crypto first, then everything else. It started in 2016 with Bitcoin. Like most people at the time, he didn't fully understand it - so he kept digging. Blockchain, tokenomics, the projects, the cycles. That curiosity never stopped, and eventually pulled him into traditional markets too: equities, commodities, macro. Not because he left crypto behind, but because you can't properly understand one without the other. What drives him is straightforward: he wants to know why something is happening, not just that it's happening. Most market coverage stops at the headline - price up, price down, here's a chart. Alex finds that kind of reporting actively unhelpful. If you walk away from an article without understanding the mechanism behind the move, what did you actually learn? He holds a degree in Tourism from New Bulgarian University - not the most obvious path into financial markets, but markets have a way of pulling in people who are simply too curious to stay out. He has authored over 200 in-depth analyses and more than 10,000 articles across crypto and traditional finance. He still thinks every day in markets teaches him something new. That's probably why he hasn't stopped.
