Shares of Silvergate Capital (SI) crashed more than 37% at Thursday’s market open after the California-based crypto bank said it is shutting down operations and starting the liquidation process.
- Shares of Silvergate Capital Corp. crashed after announcing the liquidation of its crypto bank and SEN network.
- The San Diego bank had failed to file its annual report and faced investigations.
- Silvergate was unable to recover from an $8 billion run on its deposits.
Regulators have been investigating Silvergate since it failed to submit its annual report on Form 10-K to the Securities and Exchange Commission (SEC) for the fiscal year that ended on Dec. 31, 2022. The company was given an extension until March 16 but has decided to close its business.
“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 company said in a statement. “The bank’s wind-down and liquidation plan includes full repayment of all deposits.”
Previously, Silvergate had said it would discontinue the Silvergate Exchange Network (SEN). Industry players had already begun distancing themselves from the bank, with crypto exchange Coinbase stating a day earlier that it was, “no longer accepting or initiating payments to or from Silvergate”.
Silvergate is the latest victim of the contagion that has rocked crypto markets after the collapse of FTX. Alarm bells began ringing for Silvergate investors after the company announced a loss of more than $1 billion and an $8 billion run on deposits.