Crypto-bank Silvergate to shut down after FTX fallout
STORY: One of the main banks lending to the crypto industry says it is shutting down and liquidating.
On Wednesday Silvergate Capital cited “recent industry and regulatory developments” for winding down after having served the crypto industry for a decade.
Silvergate now finds itself the latest victim of the so-called “crypto winter" jitters in the digital asset industry after the implosion of one of the company’s major customers, the exchange FTX, in November.
The company said in a statement it would repay depositors as part of its liquidation plan.
Silvergate is based in California and served high-profile firms like Coinbase and Galaxy Digital.
But the collapse of FTX, its sister firm Alameda Research, and arrest of their founder Sam Bankman-Fried for fraud and other crimes, caused a run on deposits at Silvergate.
Customers pulled more than $8 billion from the platform late last year, and the firm reported a $1 billion loss for the fourth quarter.
Multiple partners severed ties with Silvergate last week, after it warned about its viability and its sale last year of additional debt securities at a loss.
Federal prosecutors in Washington are also investigating Silvergate and its links to FTX and Alameda Research.
