Silvergate, the largest US crypto bank, has gone into liquidation – Indigo Buzz
The writing has been on the wall for a while now.
The cryptocurrency bubble has well and truly burst, and now it is bringing down the banks.
Silvergate Bank, one of the largest cryptocurrency banks in the United States, has announced that it is going into liquidation.
“In light of recent industry and regulatory developments, Silvergate believes that an orderly reduction of the Bank’s operations and a voluntary liquidation of the Bank is the best course of action,” holding company Silvergate said Wednesday. Capital company.(Open in a new tab). “The Bank’s liquidation and liquidation plan includes the full repayment of all deposits. »
It comes just five days after Silvergate Bank announced it would be ending the Silvergate Exchange Network, an instant funds transfer system that was one of its key services. The company has reassured customers that its other deposit-related services will continue to operate as it winds down, but anyone who does business with Silvergate is unlikely to want to rely on that.
California-based Silvergate Bank turned to cryptocurrency in 2013 and eventually became one of America’s leading crypto banks. But the higher they rise, the lower they fall, and for anyone following the woes of Silvergate, the writing has been on the wall for a while.
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The dramatic collapse of FTX at the end of the year had a significant impact on Silvergate, as the crypto exchange was one of the bank’s biggest customers. This sparked an $8.1 billion bank run(Open in a new tab) on Silvergate, forcing it to liquidate $5.2 billion in debt securities to cover withdrawals and suffer a loss of $718 million – a loss that has far exceeded the bank’s profit since 2013(Open in a new tab).
Silvergate also laid off 40% of its workforce in January, sending its stock down 46%, while fourth-quarter filings fell about 68%.(Open in a new tab). Read the signs, a laundry list(Open in a new tab) major crypto exchanges such as Coinbase and Galaxy Digital severed ties with Silvergate(Open in a new tab) last week, which likely exacerbated the bank’s difficulties.
At its peak, Silvergate Bank was needed at $222 per share in November 2021. Last week ended with Silverbank at $5.77 per share, and at the time of writing it is currently supplied at $2.76 .(Open in a new tab) – a drop of more than 98% since its peak.
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