Ken Griffin’s Citadel Securities Reveals 5.5% Stake in Crypto Bank Silvergate

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Feb 14 (Reuters) – Citadel Securities, the market maker owned by Citadel’s Ken Griffin, announced on Tuesday a 5.5% stake in cryptocurrency-focused lender Silvergate Capital Corp (SI.N) from a worth about $25 million, according to a regulatory filing.

Silvergate shares jumped after the disclosure and last rose around 14%.

A representative for Silvergate did not immediately respond to a request for comment.

The filing was the result of the firm’s market-making operations as opposed to a directional investment in Silvergate, according to a person familiar with the matter.

On Monday, Soros Fund Management disclosed a bet against Silvergate in a regulatory filing, which showed a put option position against 100,000 shares of Silvergate as of Dec. 31. Based on Silvergate’s closing price of $17.40 at the end of 2022, the value of these shares would be approximately $1.74 million.

Put options give investors the right to sell stocks at a certain price in the future.

Details on the put options’ strike price, their value and whether they are part of a larger trade were not available. A representative for Soros Fund Management did not immediately respond to a request for comment.

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Silvergate has sought to ease investor concerns over its future, after reporting a $1 billion loss in the fourth quarter as the bankruptcy of crypto exchange FTX rattled confidence in the digital asset industry.

Federal prosecutors in Washington are investigating Silvergate and its dealings with FTX and Alameda Research, a source familiar with the investigation said.

U.S. custodian bank State Street Corp (STT.N) announced a 9.32% passive stake in Silvergate earlier this month.

Reporting by Hannah Lang in Washington; additional reporting by Saqib Ahmed; Editing by Leslie Adler and Jane Merriman

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