After every effort put in place to avoid the unspeakable, the beleaguered crypto-friendly company Silvergate Capital Corporation has announced it is shutting down operations and voluntarily liquidating its bank, Silvergate Bank in accordance with applicable regulatory processes.
According to a release by the firm, the decision by the company comes after the crypto market experienced a collapse from several exchanges, as such allowing billions in deposits to leave the bank. The crypto-inclined financial institution believes that the wind-down and liquidation plan which involves full repayment of all deposits is the best path for the firm given its present predicament.
Although there is no mention of how the firm plans to resolve claims against its business, it noted that all deposits will be repaid in full as per the liquidation plan.
The news of the voluntary liquidation follows after the crypto-focused bank halted operations on one of its major offerings, Silvergate Exchange Network. All other deposit-related services remain operational as it continues the restructuring process.
Crypto Firms Severe Ties with Silvergate
Silvergate which is one of the major banks servicing crypto firms is one of the many firms which were impacted by the FTX implosion which happened in November 2022.
Early this month, the leading provider of innovative financial infrastructure solutions announced it will be delaying its annual report with the U.S. Securities and Exchange Commission (SEC) which resulted in a fall of the company’s stocks by over 30% at the time.
After the company’s announcement of the delay in its 10-K filing – a document that reveals a company’s financial status, several crypto firms began to distance themselves from the beleaguered company.
Even though it still had an outstanding debt due for repayment in 2025, Microstrategy, a business intelligence firm, reported that none of its over 130,000 BTC is held in custody by Silvergate adding that happenings with the crypto-focused company will not speed up its repayment plans.
Several other crypto firms including the likes of Coinbase, Bitstamp, and Gemini have all suspended deposits via the Silvergate platform and turned to other global banking partners.