Once a major banking partner for various cryptocurrency firms, Silvergate will end its operations in line with regulatory requirements.
In a press release shared on Wednesday, Silvergate Capital Corporation, the holding company for Silvergate Bank, announced the immediate winding down of the bank’s operations along with voluntary liquidation of the bank.
“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 press release states. The wind down process will include full repayment of all deposits.
Silvergate Bank will also discontinue the Silvergate Exchange Network (SEN), which it announced previously on March 3, 2023 on its website. According to the press release, all other deposit-related services remain operational.
Centerview Partners LLC will act as the bank’s financial advisor, Cravath, Swaine & Moore LLP will act as its legal advisor, and Strategic Risk Associates will provide transition project management assistance.
Just yesterday, Bitcoin Magazine PRO’s Dylan LeClair detailed the reason for this sudden collapse, writing that “Silvergate’s share price isn’t imploding due the performance of a crypto token as was the case for many companies in the crypto winter of 2022, but rather from a deposit exodus that has forced the firm to liquidate long-duration securities at a loss in order to remain liquid.” He goes on to explain the fractional reserve and lending system that evidently has led to the downfall of the bank.