Crypto Bank Silvergate Liquidates Amid Sector Turmoil

10 Mar 2023

The cryptocurrency-focused US lender Silvergate is to wind down its operations after it was hit by customer withdrawals following the collapse of crypto exchange FTX, The Guardian reports

The California-based bank had warned last week it was “less than well capitalised” after depositors demanding their money back, adding that it was evaluating its ability to operate as a going concern.

Silvergate said a voluntary liquidation of the bank was “the best path forward” in light of “recent industry and regulatory developments”. The failure of FTX sparked renewed volatility in the crypto markets. Silvergate also revealed it was being investigated by the US Department of Justice.

Its wind-down and liquidation plan includes full repayment of deposits, the bank added. Silvergate reported a $1bn (£840m) loss for the fourth quarter of 2022 after investors raced to withdraw more than $8bn in deposits, forcing it to incur losses as it sold assets to cover the cost of the withdrawals.