industry heavyweight
Battered crypto bank Silvergate wants to close
03/09/2023, 00:25
The collapse of the FTX crypto exchange also brought severe turbulence to the US bank Silvergate. To avoid bankruptcy, the company decides to go out of business.
The crypto bank Silvergate is planning its voluntary liquidation due to impending insolvency after high losses. The US company announced that business operations should be discontinued. In view of the latest developments in the industry, the resolution is “the best solution,” Silvergate said. All deposits are to be repaid in full. The bank has so far been one of the heavyweights in the industry.
Founded in 1988, Silvergate has been active in cryptocurrencies since 2013. Silvergate shares fell 35 percent in after-hours trading. The turbulence following the collapse of crypto exchange FTX threatened to bankrupt Silvergate. The crypto bank warned last week that the continuation of the business was in question. The institute postponed the presentation of the business figures for 2022, which was planned for March 16. In response, the crypto exchange Coinbase stopped all payments from or to Silvergate.
The money house, which specializes in transactions with cyber currencies such as Bitcoin, reported a loss of one billion dollars for the fourth quarter of 2022 in January. Customers worried about the FTX bankruptcy had withdrawn $8 billion in deposits from Silvergate during this period. That was about a two-thirds decrease from September 2022. To stay afloat, the institution had to sell debt securities, posting a loss of $718 million on that alone. According to further information, Silvergate was also forced to make such emergency sales in early 2023.
Silvergate isn’t the only company caught up in the FTX affair. Among other things, the rival Genesis slid partially into bankruptcy. At the same time, crypto exchange Coinbase slipped deep into the red.