Source:https:\/\/techcrunch.com\/2023\/03\/08\/crypto-friendly-bank-silvergate-to-wind-down-after-ftx-blow-up\/<\/a><\/br>
\nCrypto-friendly bank Silvergate to wind down after FTX blow-up<\/br>
\n2023-03-09 21:47:00<\/br><\/p>\n

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Silvergate Capital Corporation, the holding company of crypto-focused Silvergate Bank, announced<\/a> Wednesday its intent to wind down operations and voluntarily liquidate the banking unit.<\/p>\n

The move came days after Silvergate shocked the industry with news that it was facing a financial crisis<\/a>. The institution, which was one of the few banks that acted as an intermediary in the space of institutional crypto, is yet another victim of the \u201ccrypto winter\u201d following the implosion of FTX, which used the bank to transfer customer funds.<\/p>\n

The bank was founded three decades ago in California as a small local lender, but in recent years, it had soared to become a key player in the crypto industry. Its fortune also rose and fell with market volatility. As token prices boomed, deposits at Silvergate surged from around $2 billion in 2020 to over $10 billion in 2021. But by the end of 2022<\/a>, its deposits slumped to $6.3 billion, a decrease of over 50% from just three months earlier.<\/p>\n

At the time of FTX\u2019s collapse last fall, Silvergate tried to reassure investors and regulators that its exposure to the digital assets exchange was limited.<\/p>\n

\u201cAs of September 30, 2022, Silvergate\u2019s total deposits from all digital asset customers totaled $11.9 billion, of which FTX represented less than 10%. Silvergate has no outstanding loans to nor investments in FTX, and FTX is not a custodian for Silvergate\u2019s bitcoin-collateralized SEN Leverage loans. To be clear, our relationship with FTX is limited to deposits,\u201d Alan Lane, Silvergate\u2019s CEO, wrote in a statement<\/a> in November.<\/p>\n

But the government looked elsewhere. U.S. prosecutors in the Justice Department\u2019s fraud unit were investigating Silvergate\u2019s dealings with FTX and Alameda Research, Bloomberg reported<\/a> in February.<\/p>\n

The shutdown of Silvergate will deal a big blow to how money moves in and out of the crypto world. On March 3, the bank announced it would discontinue the Silvergate Exchange Network (SEN)<\/a>, its crypto payments network that enabled dollar transfers between investors and crypto exchanges 24\/7. The volatile nature of cryptocurrencies means very few financial institutions want to touch crypto.<\/p>\n

It looks like Silvergate\u2019s customers are at least getting their deposits back. As the company said in its latest statement:<\/p>\n

\u201cIn 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\u2019s 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.\u201d<\/p>\n<\/p><\/div>\n

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Tech, Technology<\/br>
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\nSource:https:\/\/techcrunch.com\/2023\/03\/08\/crypto-friendly-bank-silvergate-to-wind-down-after-ftx-blow-up\/<\/a><\/br><\/br><\/p>\n","protected":false},"excerpt":{"rendered":"

Source:https:\/\/techcrunch.com\/2023\/03\/08\/crypto-friendly-bank-silvergate-to-wind-down-after-ftx-blow-up\/ Crypto-friendly bank Silvergate to wind down after FTX blow-up 2023-03-09 21:47:00 Silvergate Capital Corporation, the holding company of crypto-focused Silvergate Bank, announced Wednesday its intent to wind down operations and voluntarily liquidate the banking unit. The move came days after Silvergate shocked the industry with news that it was facing a financial crisis. The […]<\/p>\n","protected":false},"author":1,"featured_media":25680,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","om_disable_all_campaigns":false,"pagelayer_contact_templates":[],"_pagelayer_content":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[17,8],"tags":[],"class_list":["post-25679","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tech","category-technology"],"yoast_head":"\n