Silvergate Capital, a prominent lender in the cryptocurrency industry, has announced that it will end its banking business and sell its assets to pay off its debts. This decision has caused Silvergate Capital’s shares to plummet by over 43% in trading after the New York Stock Exchange closed.
Silvergate Bank, one of the two main banks for crypto companies alongside New York-based Signature Bank, has approximately $11 billion in assets. However, the bank has been adversely affected by the bankruptcy of its major client, FTX. As a result, Silvergate Bank has chosen to suspend its operations and sell its assets to pay off its debts.
In a statement, Silvergate stated that “the suspension of operations and debt repayment is considered the best way forward given the situation in the crypto industry and regulatory oversight during this period.” The bank has also disclosed that all deposits will be fully repaid to bank customers.
Silvergate’s announcement comes less than a week after the suspension of the Silvergate Exchange Network (SEN) crypto payment network, which is one of the company’s core services.
Under its business closure and debt repayment plan, Silvergate has announced that it will continue to provide all deposit-related services while gradually ceasing operations. If there are any further developments, customers will be notified in due course.