Silvergate, once a major banking partner to various cryptocurrency companies, will exit operations in line with regulatory requirements.
In a press release shared Wednesday, Silvergate Bank’s holding company, Silvergate Capital Corporation, announced the immediate termination of the bank’s operations, along with the bank’s voluntary liquidation.
“In light of recent industry and regulatory developments, Silvergate believes an orderly wind-down of banking operations and voluntary liquidation of banks is the best course of action.” press release state. The cancellation process includes full refund of all deposits.
Silvergate Bank will also retire the Silvergate Exchange Network (SEN) previously announced on its website on March 3, 2023. All other deposit-related services remain operational, according to the press release.
Centerview Partners LLC acted as financial advisor to the bank, Cravath, Swaine & Moore LLP acted as legal advisor, and Strategic Risk Associates provided transition project management assistance.
Just yesterday, Bitcoin Magazine PRO’s Dylan LeClair elaborated on the reasons for this sudden collapse, writing: Deposit outflows forced liquidation of loss-making long-term securities to maintain liquidity. He goes on to describe the partial reserve and lending system that apparently led to the bank’s downfall.