Silvergate Slides on Plan to Wind Down Bank Operations and Liquidate

Silvergate Capital Corp. plans to wind down operations and liquidate its bank after the crypto industry’s meltdown sapped the company’s financial strength.

“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 in a statement.

Silvergate collapsed amid scrutiny from regulators and a criminal investigation by the Justice Department’s fraud unit into dealings with fallen crypto giants FTX and Alameda Research. Though no wrongdoing was asserted, Silvergate’s woes deepened as the bank sold off assets at a loss and shut its flagship payments network, which it called “the heart” of its group of services for crypto clients.

The company told investors March 1 that it was reviewing whether it would be able to stay in business. It’s the first bank failure in the US since 2020, according to the FDIC’s website, which listed four during the first year of the pandemic.