• Silvergate Capital Corp has announced that it will be winding down its operations and liquidating all assets in order to return all deposits.
• The company had already discontinued the Silvergate Exchange Network in early March, which acted as a conduit between crypto and traditional banking services.
• Despite efforts from the Federal Deposit Insurance Corp (FDIC) to help, Silvergate has decided to shut down completely due to increased scrutiny from regulators and a criminal investigation by the Justice Department’s fraud unit.
Silvergate Bank To Shut Down
Silvergate Capital Corp has announced that it will be winding down its operations and liquidating all assets in order to be able to return all deposits. This comes after struggling financially after the FTX debacle, coupled with increased regulatory scrutiny and a criminal investigation by the Justice Department’s fraud unit.
FDIC Efforts In Vain
The Federal Deposit Insurance Corp (FDIC) was looking into helping the company figure out a way to survive over the last few weeks, but have failed in their efforts. The decision does not come as a surprise, as the company had been struggling financially for some time now.
Flagship Payment Network Shutdown
The wind-down process is being overseen by financial advisor Centerview Partners LLC and legal advisor Cravath, Swaine & Moore LLP, with Strategic Risk Associates providing transition project management assistance. The company had already discontinued their flagship payments network – Silvergate Exchange Network – back in early March.
Silvergate is focusing on how best to resolve claims and preserve asset valuation during this process of voluntary liquidation. All applicable regulatory processes are being followed for shutting shop so that all deposits can be returned fully repaid without any problems or delays.
Ultimately, despite FDIC’s efforts, Silvergate Bank has made the call to shut down operations after experiencing deep losses due to selling off assets and closing down their payment network amidst increasing troubles with regulators. They are now undergoing voluntary liquidation with focus on resolving claims and preserving asset valuations for stakeholders before finally coming to an end