Silvergate Capital to wind down operations and liquidate bank
Beleaguered Silvergate Capital, a California, US-based provider of financial infrastructure solutions to the digital asset industry, has announced it intends to wind down its operations and liquidate Silvergate Bank.
The bank says it plans to fully repay all the deposits it holds and is also looking at how to preserve the residual value of its assets, including its proprietary technology and tax assets.
The intellectual property of Meta’s failed crypto project Diem was sold to Silvergate in February last year in a $182 million deal.
“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 says.
Silvergate will also discontinue the Silvergate Exchange Network (SEN).
The firm says all other deposit-related services remain online as the company works through the winding down process and customers will be notified of any further changes.
In January, Silvergate released its preliminary financial results for Q4 2022 that featured a run on deposits, impairment charges, layoffs, and product downsizing.
“The digital asset industry has undergone a transformational shift, with significant over-leverage in the industry leading to several high-profile bankruptcies,” Silvergate said at the time.
The ill-fated crypto exchange FTX was among its customers, the collapse of which sent shockwaves throughout the industry.