Cryptocurrency Provider Silvergate Capital Announces Liquidation of Banking Business


Liquidation of banking business

US-based Silvergate Capital, which provides crypto-asset (virtual currency)-related services, announced on the 8th that it plans to voluntarily liquidate its banking business and shrink its business.

He explained that he has determined that this policy is the best, considering recent trends in the industry and regulations. He said he is currently looking at how to actually wind down the business, including refunding all deposits and preserving the residual value of assets. Bloomberg reported yesterday that Silvergate Capital had consulted with the FDIC (Federal Deposit Insurance Corporation) to continue operations.

connection: US stocks NY Dow continues to fall Chairman Powell emphasizes that “nothing has been decided” regarding interest rate hikes | 9th Financial Tankan

Silvergate Capital is the holding company of Silvergate Bank. It was founded in 1988 and is listed on the New York Stock Exchange (NYSE). The company was reported to be in financial trouble.

Most recently, on the 1st of this month, it notified the U.S. Securities and Exchange Commission (SEC) that it could not file its annual report on time. In the report, it told the SEC that it may not be well-capitalized and is reviewing its business.

In response to this report, major US cryptocurrency exchange Coinbase and stablecoin issuer Paxos announced that they would suspend transactions with Silvergate Bank. At this time, the stock price of Silvergate Capital plummeted.

connection: U.S. Silvergate stock price plunge Following suspension of trading with U.S. coinbase and others

Status of Silvergate Capital

In January, Silvergate Capital announced provisional financial metrics for the fourth quarter of 2022 (October to December). “Currently, the digital asset industry is at a turning point, including the bankruptcy of a prominent cryptocurrency company,” he said.

It also reported that customer deposits for digital assets decreased from about 1.5 trillion yen ($11.9 billion) at the end of September 2010 to about 506 billion yen ($3.8 billion) at the end of December 2010 at the rate at the time. The company also announced that it will reduce its workforce by about 200 people, which is said to be 40% of its total workforce. In 2022, the company said it rapidly increased its workforce in line with business growth.

connection: US Silvergate, cryptocurrency-related deposits sharply decreased in 4Q 2022, to reduce employees by 40%

Regarding the impact of the bankruptcy of FTX, a statement was released in November last year. As of the end of September 2022, total customer deposits related to digital assets totaled $11.9 billion, of which FTX accounted for less than 10%.

In addition, he said that he did not invest in FTX or leave custody to him, and that his relationship with FTX was only deposits.

What is custody

Holding and managing assets on behalf of investors, companies, etc. It is a term widely used for assets other than virtual currency.

▶Cryptocurrency Glossary

connection: Severe shock in the virtual currency market, summary of Alameda shock and FTX turmoil

US Federal Reserve (Fed) Chairman Jerome Powell testified at a hearing before the Senate Banking, Housing and Urban Affairs Committee on the 7th, saying that there is a lot of turmoil in the crypto space, so banks should We should be careful about getting involved, he said.

Asked how the Fed evaluates cryptocurrency-related activity, Powell said, “We’re seeing a huge amount of disruption, like fraud, lack of transparency, and run risk.” answering.

connection: Powell Fed Chairman “Banks should pay close attention to their involvement with virtual currencies”

The post Cryptocurrency Provider Silvergate Capital Announces Liquidation of Banking Business appeared first on Our Bitcoin News.


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