Digital-asset-focused bank Silvergate Capital said Wednesday it plans to gradually scale back its operations and go into voluntary liquidation.
The move, which comes after the bank grappled with losses in the wake of FTX’s dramatic crash, sent its shares tumbling 35% in aftermarket trading.
The decision to close the bank comes after Silvergate warned last week that it was assessing its ability to operate, revealing it had sold more debt at a loss this year and that further losses would mean the bank could be “less than well capitalized”. .
The potential closure of La Jolla, California-based Silvergate, a favorite bank of the cryptocurrency industry, shows the extent of the impact of the fall of FTX, which filed for creditor protection at the end of the year past.
In a statement, Silvergate said the decision to shut down the bank’s operations was “the best way forward” in light of “recent industry and regulatory developments”. The plan calls for full repayment of deposits, the bank added.
Founded in 1988, Silvergate ventured into the cryptocurrency market in 2013. The bank also operated a real estate finance business, but announced the closure of that division in December, citing the backdrop of rising interest rates and lending volumes reduced.
Source: Terra
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