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    Home»News»Silvergate Announces Voluntary Liquidation
    News

    Silvergate Announces Voluntary Liquidation

    Anietie DavidBy Anietie DavidMarch 10, 2023Updated:March 10, 2023No Comments3 Mins Read
    Silvergate Announces Voluntary Liquidation
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    The Crypto-friendly bank, Silvergate, has had a spate of partners cut ties with them following their involvement with FTX.

    With the demise of FTX and the accompanying enquiries into how much Silvergate knew about the FTX Group’s financial practices, danger began to brew for the bank. These problems were simply getting worse. Initially, Silvergate revealed that the results of their K-10 report would be delayed by several weeks, generating anxiety among investors.

    Immediately after this statement, other crypto heavyweights such as Coinbase and Kraken declared that they, too, will be moving their operations elsewhere. Even as recently as last week, Silvergate announced the closure of their crypto payment network, which was one of the bank’s primary selling points for crypto exchanges. At the time, it was unclear whether the bank was merely shifting its focus to a different consumer or winding down.

    But, Silvergate’s intention to close its doors and initiate a voluntary liquidation has become official, as revealed by a press statement issued today.

    Despite their former business partner’s implosion, which may have played a key influence in the firm’s later failure, the bank has said that all client deposits would be reimbursed in full.

    Silvergate Taking Slow Steps Towards Liquidation

    Silvergate was apparently in serious financial problems, although they were not yet insolvent. Nevertheless, due to recent regulatory measures, Silvergate leadership decided that closing down operations while still solvent was a preferable alternative than trying a return.

    Silvergate was already under investigation by members of Congress, as well as the Federal Reserve and the California Department of Financial Protection and Innovation at the time this statement was issued.

    Additional information will be provided on how Silvergate intends to handle investor claims and protect the residual value of their assets, which include in-house produced technology and “tax assets.”

    The liquidation of the firm will be overseen by financial advisor Centerview Partners LLC and legal firm Cravath, Swaine & Moore LLP.

    Silvergate’s collapse will leave Signature Bank as the primary traditional bank renowned for dealing with crypto-related clients. Only time will tell if Signature will swoop in and take up the bulk of crypto platforms as customers, or whether crypto platforms will choose for stablecoins as a store of value.

    It’s crucial to emphasize that this is a voluntary liquidation rather than a bankruptcy, which implies that the crypto bank will have no trouble repaying its creditors. As a result, it’s doubtful that this will have the same negative impact on Bitcoin as the FTX debacle or the Luna-UST catastrophe. However, the effects are already visible, as volume has dried across the board and market participants remain reluctant to step in.

    Blockchain FTX FTX Crash Silvergate
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    Anietie David

    Anietie has worked in the blockchain industry for three years, gaining experience in blockchain technology, cryptocurrencies, DeFi, and NFTs. As a seasoned content writer, he is passionate about creating effective content strategies for blockchain brands. In addition to content writing, he also has a strong interest in front-end development. When he's not working, he spends his time reading horror novels or playing CODM.

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