Crypto banking titan Silvergate closing shop

The company last week suspended its Silvergate payments network

Photo for illustrative purposes only. - Reuters file

By AFP

Published: Thu 9 Mar 2023, 2:55 PM

Crypto banking colossus Silvergate on Wednesday said it will shut down in the face of market turmoil and regulatory pressure.

Silvergate Bank opened in 1988 and started "pursuing digital currency customers" in 2013, according to its parent company Silvergate Capital Corporation.

"In light of recent industry and regulatory developments, Silvergate believes that an orderly wind down of Bank operations and a voluntary liquidation of the Bank is the best path forward," the parent company said in a release.

"The Bank's wind down and liquidation plan includes full repayment of all deposits."

Shares in California-based Silvergate Capital, which had been slipping in recent weeks, plunged more than a third in value in after market trades.

The company last week suspended its Silvergate payments network, which allowed its customers to make transfers any time of day or night.

US officials are cracking down on the cryptocurrency sector after the uproar caused by the recent bankruptcy of FTX and Alameda Research.

FTX, once the world's highest-profile crypto exchange, collapsed spectacularly in November, leaving nine million customers in the lurch and seeing co-founder Sam Bankman-Fried indicted for fraud by US prosecutors.

FTX was a client of Silvergate Capital, which reported a billion dollar loss in the final three months of last year as deposits shrank by more than half.

In a stock exchange filing last week, Silvergate said it was delaying release of its annual report, in part because of ongoing investigations by United States authorities.

Several crypto companies including Coinbase, Paxos and Gemini subsequently distanced themselves from Silvergate.