© Reuters. A representation of bitcoin is seen in an illustrative image 6/23/2017 REUTERS/Benoit Tessier
By Hannah Lang and Anirban Chakroborti
(Reuters) – Digital asset-focused bank Silvergate Capital (NYSE:) said on Wednesday it plans to gradually scale back its operations and voluntarily go into liquidation.
The move, which comes after the bank grappled with losses in the wake of the dramatic FTX meltdown, sent its shares down 35% in aftermarket trading.
The decision to close the bank comes after Silvergate warned last week that it was assessing its ability to operate, revealing it had sold additional debt securities at a loss this year and that further losses would mean the bank could be “less than well capitalised”. .
The potential closure of La Jolla, Calif.-based Silvergate, one of the crypto industry’s favorite banks, shows the extent of the impact of the fall of FTX, which filed for creditor protection at the end of the year. past.
In a statement, Silvergate said the decision to close the bank’s operations is “the best way forward” in light of “recent regulatory and industry developments”. The plan includes full repayment of deposits, the bank added.
Founded in 1988, Silvergate ventured into the cryptocurrency market in 2013. The bank also operated a property finance business, but announced in December the closure of that division, citing the environment of rising interest rates and reduced lending volumes. mortgages.
(Reporting by Hannah Lang in Washington and Anirban Chakroborti in Bengaluru; Additional reporting by Manya Saini in Bengaluru).