After being the main banking partner for various cryptocurrency companies, Silvergate will end its operations in line with regulatory requirements.
In a press release shared on Wednesday, Silvergate Capital Corporation, the parent company for Silvergate Bank, announced the immediate winding up of the bank’s operations along with the voluntary liquidation of the bank.
“In light of recent industry and regulatory developments, Silvergate believes that orderly operations of the Bank and voluntary liquidation of the Bank is the best course of action,” the press release said. The downgrade process will include repayment of all deposits.
Silvergate Bank will also terminate the Silvergate Exchange Network (SEN), which was previously announced on March 3, 2023 on its website. According to the press release, all deposit related services remain operational.
Centerview Partners LLC will serve as the bank’s financial advisor, Cravath, Swaine & Moore LLP will serve as legal counsel, and Strategic Risk Associates will provide transition project management assistance.
Just yesterday, Bitcoin Magazine PRO’s Dylan LeClair explained the reason for this sudden collapse, writing that “Silvergate’s share price did not explode due to the performance of crypto tokens as happened to many companies in the crypto season 2022, but from the exodus of deposits that have forced the company to liquidating long-lost securities to keep them liquid.He went on to explain the fractional reserves and lending system that clearly led to the collapse of the bank.