EOS parent company Block.one Sells Entire Equity Position in Silvergate Bank, Resulting in $83 Million Loss
Block.one, the parent company of EOS, has sold its entire equity position in Silvergate Bank, resulting in a loss of approximately $83 million. The company had raised $4 billion in an initial coin offering (ICO) for its Ethereum competitor, EOS.
The decision to exit the equity position comes after Silvergate Bank announced that it would not be filing its annual report with the U.S. Securities and Exchange Commission (SEC) on time, leading to its decision to wind down operations.
Despite its disappointment in how things ended for Silvergate, Block.one remains convinced that banks and other financial institutions embracing the digital asset and cryptocurrency sectors are well-positioned. As of last year, Brendan Blumer, the CEO of Block.one, and his company held a combined 9.9% stake in Silvergate Bank worth approximately $95 million.
Leading up to the announcement last week, several institutional clients, including crypto exchange Coinbase, USD Coin (USDC) issuer Circle, and investment firm Galaxy, had severed ties with the crypto-friendly bank. In November, Block.one had praised Silvergate Bank for maintaining a liquid and conservative balance sheet investment portfolio.
Block.one’s portfolio company Bullish, a crypto exchange, has no exposure to Silvergate, according to the press release. However, the status of a $225 million revolving line of credit issued to Bullish in May last year was not mentioned in the release. This decision by Block.one to sell its equity position in Silvergate Bank highlights the volatility and risks associated with investments in the cryptocurrency sector.
Read more:
- Silvergate Bank To Wind Down Operations Amid Industry And Regulatory Developments
- Silvergate Bank Suspends Transfer Network To Cryptocurrency Exchanges
- Binance, Coinbase And KuCoin CEOs Confirm User Funds Unaffected By Silvergate Bank Issue