Silvergate to shut down crypto bank, shares fall 50%

• Silvergate shares plunged on news that the crypto-friendly bank would scale back operations.
• The company has said it will fully repay all customer deposits.
• Silvergate has been in trouble since late 2022 following the collapse of crypto exchange FTX.

Silvergate Capital’s stock plunged nearly 50% after the company announced it would be closing its cryptocurrency bank.

The company’s shares closed in the red on Wednesday, dropping more than 30% shortly after the news as investors reacted to the news. As of 7:50 a.m. ET Thursday, the troubled crypto-friendly bank’s share price fell 48.8% before the market opened.

Crypto prices also fell as the news added to the negative sentiment across the market.

Silvergate to close cryptocurrency bank

in a press release It was published Late Wednesday, Silvergate announced it would close Silvergate Bank and liquidate its assets.

“In light of recent industry and regulatory developments, Silvergate believes an orderly winddown of banking operations and voluntary liquidation of banks is the best course of action. The Bank’s wind-down and liquidation plan includes full repayment of all deposits. We also consider how best to resolve claims and preserve the residual value of our assets, including proprietary technology and tax assets. the company wrote.

Silvergate Bank was facing increasing difficulties after the bankruptcy of its main customer, FTX, last November.

The company disclosed a $1 billion loss earlier this year and a significant drop in customer numbers. In recent weeks, crypto banks have found themselves at the center of investigations from US regulators amid mounting financial challenges.

Silvergate’s withdrawal from the cryptocurrency scent leaves New York-based Signatory Bank, a banking provider with over $114 billion in assets, as the leading crypto-friendly bank.