Silvergate capital corporation decided to shut down its crypto-friendly Bank.
Silvergate Bank was a popular bank in the Crypto sector, known to provide banking services to crypto companies. The majority of the financial services of this bank were associated with crypto exchanges. Many crypto companies collapsed badly in 2022, which also impacted Silvergate Bank’s financial position. Around a week ago, Silvergate company already confirmed that it will report a significant downfall in its revenue in the upcoming 10k-filling.
On 8 March 2023, Silvergate Capital Corporation’s filing with the United States Securities and Exchange Commission (SEC) confirmed that the company decided to liquidate its Bank.
“In light of recent industry and regulatory developments, Silvergate believes that an orderly wind-down of bank operations and a voluntary liquidation of the bank is the best path forward,” the company said.
Under the liquidation plan, Silvergate aimed to compensate all the affected parties by 100%. In short Silvergate Bank’s partner companies or service users will not face any kind of loss.
California DFPI Commissioner Clothilde Hewlett said that the Department of Financial Protection and Innovation is closely monitoring the liquidation process to ensure that everything is going on perfectly.
Regulatory pressure on Banks
Since the last few months, reportedly the new crypto startups are failing to get Banking partners because of regulatory pressure.
Officially all the banks in the US are free to provide banking services to the crypto companies but still, they are facing regulatory heat from the US authorities.
Recently Kraken crypto exchange spokesperson confirmed that it will soon launch its own Bank despite unclear regulatory policies on the crypto sector.
In Feb 2023, Kraken settled a case with the SEC agency and paid a $30 million fine over its crypto-staking services.
Read also: Judge says SEC advancing its personal agenda than adhering to the law: Ripple vs SEC
Silvergate finally decides to shut down the bank