Crypto-focused Silvergate Bank announced on Wednesday that it will self liquidate its assets and unwind operations of its holding company, Silvergate Corp (SI). Questions loomed over the bank’s future after the firm declared that it would delay filing its annual 10-K report due to questions over its figures from independent auditors and accounting firms.
On Wednesday, Silvergate Corp. announced it had recruited Centerview Partners as a financial adviser and the law firm, Cravath, Swaine and Moore LLP and Strategic Risk Associates for “transition management assistance.”
The company however, assured depositors that they’ll be repaid in full. The bank is also working out a way to resolve claims, while preserving the value of their remaining assets – including proprietary and tax assets. The decision to shutter operations came “in light of recent industry and regulatory developments,” where the bank believed that a voluntary liquidation is the best path forward.
Last week, crypto-focused Silvergate Bank also announced that it was being questioned by regulators and the Department of Justice – warning investors that its ability to remain open and becoming a ‘going concern’ over the next 12 months remains doubtful.
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As a result, the bank’s holding company’s stock price fell by 58% to an all-time low of $5.72 – down over $115 from the past year. Major crypto clients also cut ties with the bank upon hearing the news. Unfortunately, Silvergate’s stock tumble wasn’t done yet, as Wednesday’s announcement saw the price dip even further during after-hours trading. Silvergate’s competitor, Signature Bank, another crypto-friendly bank, also saw its own stock tumble by nearly 10% before rebounding slightly.
