The crypto industry banker was hard hit by the bankruptcy of FTX, and on Wednesday announced that it will close operations and liquidate its bank
Silvergate Capital SI served as one of the main banks for the crypto industry, prior to its collapse earlier this week. The news came just a week after the firm delayed its annual report to the U.S. Securities and Exchange Commission, causing shares of the Silvergate Capital to slump.What is Silvergate Capital? Silvergate... Silvergate Capital SI served as one of the main banks for the crypto industry, prior to its collapse earlier this week.
Even though the bank didn’t directly deal with cryptocurrencies, because withdrawals and deposits were done in fiat currencies, most of its clients dealt with crypto, meaning it was hard hit when the crypto market slumped last year. This included FTX, one of the largest crypto exchanges in the industry before it filed for Chapter 11 bankruptcy.
Earlier this year, market makers like Blackrock BLK and Citadel announced having a stake in Silvergate, at 7% and 5.5% respectively. In January, a group of U.S. senators sent a letter to the bank questioning its role in FTX’s business practices. The letter also criticized the bank for taking out a loan from the Federal Home Loan Bank of San Francisco which could “further introduce crypto market risk into traditional banking system.”
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