A crucial lender to the cryptocurrency industry, Silvergate Capital, said on Wednesday that it is closing its doors and liquidating its bank. In after-hours trading, the stock fell more than 49%.
Silvergate, along with New York-based Signature Bank, has been one of the two primary banks for crypto businesses. Silvergate has slightly more than $11 billion in assets, while Signature has more than $114 billion. The now-defunct cryptocurrency exchange FTX was a prominent Silvergate customer.
“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 business said in a statement.
The wind-down and liquidation plan also includes full repayment of all deposits. However, the company hasn’t revealed how it plans to resolve claims against its business.
Centerview Partners will act as a financial advisor, while Cravath, Swaine & Moore is acting as a legal advisor and Strategic Risk Associates is providing transition project management assistance.
Last week, Silvergate Capital failed to file its 10-k financial report to US SEC due to regulatory challenges and said it was evaluating “its ability to continue as a going concern.”
Following the news, many crypto firms cut relations with Silvergate. It includes Microstrategy, Coinbase, Paxos, Galaxy Digital, Gemini, BitStamp, Crypto.com, and Circle.
Also Read: Silvergate Uncertainty Wipeout Bitcoin’s $20 Billion Market Cap
