Silvergate Bank to Wind Down Operations Amid Industry and Regulatory Developments
Silvergate Bank, a subsidiary of Silvergate Capital Corporation, has announced its intention to wind down operations and voluntarily liquidate the bank in an orderly manner in accordance with applicable regulatory processes. The decision was made in light of recent industry and regulatory developments, with the bank believing that an orderly wind-down and liquidation is the best path forward.
The bank’s plan includes the full repayment of all deposits, and the company is currently considering how best to resolve claims and preserve the residual value of its assets, including its proprietary technology and tax assets.
In connection with the wind-down, Silvergate has engaged Centerview Partners LLC as its financial advisor, Cravath, Swaine & Moore LLP as its legal advisor, and Strategic Risk Associates as its transition project management assistance.
The bank has also decided to discontinue the Silvergate Exchange Network (SEN), which was announced on March 3, 2023, on its public website. All other deposit-related services remain operational as the company works through the wind-down process. Customers will be notified of any further changes should they arise.
This press release contains forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended. While the bank believes that the expectations reflected in these statements are reasonable as of the date made, they are not guarantees of future performance and are subject to risks, assumptions, and uncertainties that are difficult to predict.
There are or will be important factors that could cause the bank’s actual results to differ materially from those indicated in these forward-looking statements, including the ability to wind down operations and liquidate the bank in an orderly and timely manner and to fully repay customer deposits, and to successfully resolve claims and preserve any residual value of its assets.
The bank’s decision to wind down operations and liquidate comes at a time of heightened regulatory scrutiny of banking institutions that provide products and services to the digital asset industry. There are also risks and uncertainties, including potential liability and restrictions on the bank’s historical business, resulting from various litigation and regulatory and other inquiries and investigations against or with respect to the bank. These investigations include those from banking regulators, congressional inquiries, and investigations from the U.S. Department of Justice.
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