Silvergate capital corporation is set to wind down and enter voluntary liquidation for its crypto bank due to the financial crisis and unfolding developments, according to the March 8 press release.
Meanwhile, the bank revealed that part of the liquidation plan was to make full repayment of all deposits. This implies that customers or crypto partners will not be adversely affected by the bank’s indiscriminate wind down.
Prior to now, Coinbase crypto exchange had ceased to partner with Silvergate following the failure of the crypto bank to submit its 10-K report.
Other crypto firms like Paxos, Gemini, BitStamp and Galaxy Digital took similar steps in March by cutting ties with the crypto bank.
However, X3 Founder Andrew reported that the employees of Silvergate have been urged to brace up and prepare for liquidation and indiscriminate shutdown. Thereafter the company’s charter will be handed over to the FDIC.
UPDATE: Employees at Silvergate $SI have been told to prepare for liquidation and shutdown imminently.
**Source: “we’ve been told that an orderly liquidation will be announced and our charter will be handed over to the FDIC.”
**employees have been given their WARN Act… https://t.co/2v15gcjMHQ
— Andrew (@AP_Abacus) March 8, 2023
Until its financial crisis, Silvergate was one of the major banks providing banking partners for numerous crypto firms. The company’s ordeal started due to its inability to provide an annual 10-K report, which represents an overview of the company’s financial condition.
Binance CEO Sympathises with Silvergate
In light of the unfolding development, Binance CEO Changpeng Zhao (CZ) sympathizes with Silvergate over the state of things. He further expressed optimism that users will be duly protected since all deposits will be returned in full.
— CZ 🔶 Binance (@cz_binance) March 9, 2023
In the same vein, a crypto user, Vancouver, expressed sadness that it is bad to see a major player in the crypto industry go down the drain.
While more sympathetic feelings have been expressed on the matter, what is most important is for other crypto banks to review what led to the downfall of Silvergate in order to avert similar circumstances.
The crypto industry is still at a nascent stage, and endless indiscriminate collapse of major players will not only cast doubt on the sector but it will attract more punitive laws from regulators.