Silvergate Bank Announces Plans to Shut Down Amid Market Turmoil Following FTX Collapse

US officials are cracking down on the cryptocurrency sector after the calamitous collapse of crypto firm FTX.

By Agence France-Presse | Updated: 9 March 2023 14:40 IST

Silvergate Bank Announces Plans to Shut Down Amid Market Turmoil Following FTX Collapse

Photo Credit: Reuters

Silvergate Bank opened in 1988

Highlights

Shares in Silvergate Capital plunged more than a third in value
Last week the company suspended its Silvergate payments network
FTX was a client of Silvergate Capital

Crypto banking colossus Silvergate on Wednesday said it will shut down in the face of market turmoil and regulatory pressure.

Silvergate Bank opened in 1988 and started "pursuing digital currency customers" in 2013, according to its parent company Silvergate Capital Corporation.

"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 parent company said in a release.

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"The Bank's wind down and liquidation plan includes full repayment of all deposits."

Shares in California-based Silvergate Capital, which had been slipping in recent weeks, plunged more than a third in value in after market trades.

The company last week suspended its Silvergate payments network, which allowed its customers to make transfers any time of day or night.

Bitcoin Slips to Lowest in Weeks, Crypto Market Cap Drops Below $1 Trillion

US officials are cracking down on the cryptocurrency sector after the uproar caused by the recent bankruptcy of FTX and Alameda Research.

FTX, once the world's highest-profile crypto exchange, collapsed spectacularly in November, leaving nine million customers in the lurch and seeing cofounder Sam Bankman-Fried indicted for fraud by US prosecutors.

FTX was a client of Silvergate Capital, which reported a billion dollar loss in the final three months of last year as deposits shrank by more than half.

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In a stock exchange filing last week, Silvergate said it was delaying release of its annual report, in part because of ongoing investigations by United States authorities.

Several crypto companies including Coinbase, Paxos and Gemini subsequently distanced themselves from Silvergate.

Will crypto tax hurt the industry in India? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

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