Silvergate Bank, one of the largest crypto-friendly banks, is preparing to wind down its operations and voluntarily liquidate its assets, the company behind the bank said in a press release on 8 March.
According to the announcement, Silvergate Capital Corporation (SCC) has made the decision to shutter the operations of its bank and liquidate its assets in accordance with regulatory processes due to “recent industry and regulatory developments”. The liquidation plans of Silvergate Bank also include the “full repayment of all deposits”. SCC wrote in its press release:
“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 Bank’s wind down and liquidation plan includes full repayment of all deposits.”
The crypto-friendly bank noted it is now considering how to best resolve claims and preserve the “residual value of its assets”, including its proprietary technology and tax assets. The news of the bank winding down its operations came less than a week after Silvergate revealed it would be closing its exchange network SEN.
Last week, a number of major crypto firms — including Coinbase, Paxos, Gemini, BitStamp, and Galaxy Digital — announced they will be cutting ties with Silvergate. The decision was made out of an “abundance of caution” for institutional client funds, as well as in light of “recent developments” such as the investigation into Silvergate’s involvement in the collapse of the FTX exchange.
The unfortunate situation of Silvergate was used by some U.S. lawmakers to make a comment about the crypto industry, calling it a “risky, volatile sector” that could affect the financial system. Senator Elizabeth Warren quickly took advantage of the situation by calling on regulators to “step up against crypto risk”, and tweeted: