Crypto-Friendly Bank Silvergate to Shut Down Operations
On Wednesday, Silvergate, the bank that has a reputation for being crypto-friendly, announced that it was winding down its operations due to regulatory and industry developments.
Silvergate Bank’s holding company, Silvergate Capital Corporation, issued a press release on Wednesday in which it said that the best path was to wind down the operations of the bank and liquidate it voluntarily.
The winding down
The press release said that the winding down and liquidation plans include repayment of all deposits in full.
It also said that the company was looking into how the claims could be resolved and the best approach for preserving the residential value of the bank’s assets, including tax and proprietary technology.
Silvergate Capital also clarified in the announcement that they were liquidating the bank voluntarily and were following the appropriate regulatory process to do so.
Previously, Silvergate had also announced the discontinuation of the Silvergate Exchange Network (SEN).
Scrutiny
In light of the recent crypto fiascos, US regulators had been scrutinizing Silvergate and its operations and the White House had also confirmed the same.
US Senator Elizabeth Warren had criticized crypto-friendly banks, such as Silvergate, of leaving traditional banking system vulnerable to the risks of the crypto market.
Warren said that the general public would be the ones to suffer the consequences. She said in January that it is the job of banking regulators to protect taxpayers and the banking system from crypto fraud.
She had said that the regulators had the tools for the job and they just have to utilize them.
More details
The announcement from Silvergate dictated that while the bank is in the process of shutting down, all deposit-related services would continue as per routine.
The company stated that if there are any changes, it would notify its customers accordingly.
The news of the shutdown came a week after the US-based crypto exchange, Coinbase, announced that it was stopping Silvergate Bank payments.
The bank had come under scrutiny particularly after the collapse of the FTX crypto exchange, as it had the support of its co-founder, Sam Bankman-Fried, who is currently awaiting his trial in the United States.
Editorial credit: Maurice NORBERT / shutterstock.com
