Silvergate stock tumbles after Crypto Bank shutdown

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Shares of Silvergate Capital (SI) tumbled more than 37% at market open Thursday after the California-based crypto bank said it was shutting down operations and entering the liquidation process.

Silvergate Capital Corp.’s Key Takeaway Stocks collapsed after announcing the liquidation of its crypto bank and SEN network. The San Diego bank had not filed its annual report and had been investigated. Silvergate could not recover from an $8 billion run on its deposits.

Regulators have been investigating Silvergate since it failed to file its annual report on Form 10-K with the Securities and Exchange Commission (SEC) for the fiscal year that ended December 31, 2022. The company obtained an extension until March 16 but decided to close his business.

“In light of recent industry and regulatory developments, Silvergate believes that an orderly wind-down of banking operations and a voluntary liquidation of the bank is the best course of action,” the company said in a statement. “The liquidation and liquidation plan for the banks includes the full repayment of all deposits.”

Previously, Silvergate announced that it would be terminating the Silvergate Exchange Network (SEN). Industry players had already begun to distance themselves from the bank, with crypto exchange Coinbase declaring a day earlier that it was no longer accepting or initiating payments to or from Silvergate.

Silvergate is the latest victim of the contagion that rocked the crypto markets after the collapse of FTX. Alarm bells started ringing for Silvergate investors after the company announced a loss of more than $1 billion and an $8 billion run on deposits.

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