‘Crypto Friendly’ Bank Silvergate to Wind Down Operations
Citing regulatory headwinds and the bear market, Silvergate Capital announced it is shuttering Silvergate Bank.
Blaming “recent industry and regulatory developments,” crypto-friendly bank Silvergate announced today that it is winding down operations.
According to a Wednesday press release by Silvergate Capital Corporation, the holding company of Silvergate Bank, an orderly wind-down of Bank operations and a voluntary liquidation of the Bank is the best path forward.
“The Bank’s wind down and liquidation plan includes full repayment of all deposits,” the press release said. “The Company is also considering how best to resolve claims and preserve the residual value of its assets, including its proprietary technology and tax assets.”
In the announcement, Silvergate Capital said it is voluntarily liquidating the Bank “in an orderly manner and in accordance with applicable regulatory processes.”
Silvergate previously announced that it will also discontinue the Silvergate Exchange Network (SEN).
Beyond the protracted crypto bear market, Silvergate has recently drawn the scrutiny of U.S. regulators, with the White House confirming it was tracking the bank’s condition. U.S. Senator Elizabeth Warren accused “crypto-friendly” banks like Silvergate of opening the banking system up to the greater risk of “crypto collapse,” which she says will leave the American taxpayers holding the bag.
“It’s the bank regulators’ job to insulate the banking system and taxpayers from the risk of crypto fraud,” Warren said in a recorded speech in January. “They have the tools, and they need to use them.”
Warren’s remarks prefaced a virtual panel discussion titled “Confronting the Crypto Challenge: Learning From a Meltdown.”
According to today’s announcement, all other deposit-related services remain operational as the company works through the wind-down process.
“Customers will be notified should there be any further changes,” the company said.
The news comes a week after Coinbase, the largest U.S.-based cryptocurrency exchange, said it is halting payments with Silvergate Bank.