At 4:30 PM Eastern time, Silvergate Bank announced its intention to cease crypto-friendly banking operations and voluntarily liquidate its assets. The news follows significant financial troubles the bank has faced, and the company’s stock has plummeted in value.
Details of Silvergate’s plans to downsize and liquidate its operations
Over the past six months, Silvergate Capital Corporation’s (NYSE: SI) stock price has fallen 94.82% against the US dollar as the company faces significant financial troubles related to its exposure to the now defunct crypto exchange FTX. 2023 On Wednesday, March 8, the company announced plans to scale back operations and liquidate the bank; four days earlier, Silvergate discontinued its Silvergate Exchange Network payment platform.
“In light of recent industry and regulatory developments, Silvergate believes that an orderly wind-down of its banking operations and voluntary liquidation of the bank is the best course of action.” The company’spress releaseelaborates. “The bank’s plan of arrangement and liquidation 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 proprietary technology and tax assets,” the Silver Gate statement added.
Silvergate’s stock closed Wednesday at$4.91per share after losing 40.99% of its USD value over the past five days. The bank’s stock was downgraded by banking giant JP Morgan last week after telling the Securities and Exchange Commission (SEC) that it must delay reporting its annual fiscal year results. In its filing, Silvergate referred to its “ability to continue as a going concern” and also noted that it faces regulatory scrutiny from U.S. authorities. After the stock downgrade, large crypto companies such as Circle, Crypto.com, Gemini, Paxos, and Coinbase distanced themselves from the crypto-friendly bank.
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