Silvergate Bank which served the crypto industry will close after

Silvergate Bank, which served the crypto industry, will close after the collapse

Silvergate Capital Corporation, which owns Silvergate Bank, which serves the largest players in the cryptocurrency industry, explainedthat the credit institution will restrict its operations and be liquidated on a voluntary basis.

    Image source: tom bark /

Image source: tom bark /

The decision comes days after the bank shocked the entire cryptocurrency industry with the news that it was facing a financial crisis. Silvergate was one of the few banks to cater to the digital asset industry – falling another victim of the “crypto winter” sparked by the collapse of the FTX exchange.

Founded as a small local lending institution in California about 30 years ago, Silvergate has only grown into a major player in the overall cryptocurrency industry in the last few years. Its financial position has been extremely volatile as it fluctuated with the market: in 2020, Silvergate’s deposits were about $2 billion, in 2021 they exceeded $10 billion, and by the end of 2022 they were at $6.3 billion US Dollar fell, down 50%. than just three months before.

When FTX collapsed last fall, the bank was trying to convince investors and regulators that its involvement in the digital asset movement was limited: As of September 30, 2022, Silvergate had $11.9 billion in deposits, and only 10% of them were in FTX. the head of the bank reported in November. However, the US Department of Justice has investigated in detail all the details of Silvergate’s deals with FTX and Alameda Research.

The bank shutdown will deal a major blow to financial flow patterns in the cryptocurrency industry. On March 3rd, it was announced the termination of the Silvergate Exchange Network (SEN) – a payments system that enabled 24/7 money transfers from investors and cryptocurrency exchanges. The bank promised to fully meet its obligations from customer deposits.

About the author

Robbie Elmers

Robbie Elmers is a staff writer for Tech News Space, covering software, applications and services.

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