Silvergate Bank announces liquidation and cessation of operations
Once a key banking partner for various cryptocurrency firms, Silvergate will cease operations in accordance with regulatory requirements.
In a press release shared on Wednesday, Silvergate Capital Corporation, the holding company of Silvergate Bank, announced the immediate cessation of the bank’s operations along with the bank’s voluntary liquidation.
“Given recent industry and regulatory developments, Silvergate believes that an orderly winding-up and voluntary liquidation of the bank is the best way forward,” the press release reads. The settlement process includes full repayment of all deposits.
Silvergate Bank will also be retiring the Silvergate Exchange Network (SEN), which it previously announced on its website on March 3, 2023. According to the press release, all other deposit-related services will remain operational.
Centerview Partners LLC will act as financial advisor to the bank, Cravath, Swaine & Moore LLP will act as legal advisor and Strategic Risk Associates will assist with transition project management.
Just yesterday, Dylan LeClair explained from Bitcoin Magazine PRO explained the reason for this sudden drop, writing: “Silvergate’s share price is not imploding on the performance of a crypto token like many companies have seen in the crypto winter of 2022, but rather on a churn of deposits that is driving the forced companies to liquidate long-dated securities at a loss in order to remain liquid.” He goes on to explain the fractional reserve and credit systems that apparently led to the bank’s demise.
Source: Crypto News Deutsch