Silvergate shares tumble after company says it’s shutting down crypto bank
Silvergate shares fell sharply after news the crypto-friendly bank would be winding down operations.
The company says it will issue full repayments of all customer deposits.
Silvergate has been in trouble since late 2022 following the collapse of crypto exchange FTX.
Silvergate Capital shares have plummeted nearly 50% after the company announced it would be winding down its crypto bank.
The company’s stock had closed in the red on Wednesday, falling by more than 30% shortly after the news as investors reacted to the news. As of 7:50 am ET on Thursday, shares of the troubled crypto-friendly bank were 48.8% down ahead of markets open.
Crypto prices also fell as the news added to the negative sentiment across the market.
Silvergate to wind down crypto bank
In a press announcement published late Wednesday, Silvergate said it would be shutting down the Silvergate Bank and liquidating its assets.
“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 Bank’s wind down and liquidation plan includes full repayment of all deposits. The Company is also considering how best to resolve claims and preserve the residual value of its assets, including its proprietary technology and tax assets,” the firm wrote.
Silvergate Bank had increasingly hit troubled waters following the collapse of its main customer FTX last November.
The company revealed a $1 billion loss earlier this year, and a significant decline in customer numbers. In recent weeks, the crypto bank has found itself at the center of investigations from US regulators amid mounting financial challenges.
Silvergate’s exit from the crypto scent leaves Signature Bank, a New York-based banking providers with over $114 billion in assets as the main crypto-friendly bank.
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