• Silvergate Bank will halt operations and undergo liquidation
• The company made this decision due to “recent industry and regulatory developments”
• Silvergate previously announced it would halt its Silvergate Exchange Network (SEN) while other services continue to operate.
Silvergate Bank Shutting Down
Silvergate Bank announced today that it will wind down operations and undergo liquidation, according to a March 8 press release from its holdings company, Silvergate Capital. The company said that bank operations will be halted in accordance with regulations, and that this course of action will involve a full repayment of all deposits.
Cause For Closure
The company did not specify the cause for the closure but stated that it was due to “recent industry and regulatory developments” without naming any specific events. It is unclear whether other regulators and government bodies will become involved in the matter.
Other Services Affected
Silvergate previously announced that it would halt its Silvergate Exchange Network (SEN) while ensuring that other services continue to operate. It reiterated today that its other deposit-related services will remain active during the wind-down process.
On March 3, Silvergate submitted an SEC filing stating that it would file a late 10-K report. In addition, the company also said that it faced inquiries from regulators such as the U.S. Department of Justice (DOJ). That investigation may concern Silvergate’s relationship with FTX, as reported in February, though the filing does not state this outright.
Several major crypto companies stopped using Silvergate’s services shortly after the filing (and shortly before the company announced that it would halt its SEN service). Many of those companies began to use the competing Signature Bank. The value of Silvergate (SI) is down 5.76% today and down 63% since March 1