According to Silvergate Capital Corporation, it will cease operations and voluntarily dissolve Silvergate Bank in compliance with relevant regulatory requirements.
Silvergate Capital Corporation announced that it would cease operations and voluntarily liquidate Silvergate Bank, one of the cryptocurrency industry’s most prominent banks, raising concerns that crypto firms’ access to the U.S. banking system will become more concentrated, which could discourage new businesses from entering the sector.
” The strategy for winding down and liquidating the bank involves the return of all deposits in full. Also, the firm is contemplating how to effectively settle disputes and protect the residual value of its assets, particularly its intelligent technology and tax assets.
“The Department of Financial Protection and Innovation is actively watching the situation to ensure the safe and timely liquidation of Silvergate Bank,” stated Clothilde Hewlett, the California DFPI commissioner. “The department is examining compliance with all financial laws and safety and soundness requirements, and is collaborating closely with its federal colleagues.” Silvergate is a state-chartered bank in California.
The likely death of a famous crypto-friendly bank drew the attention of the head of the Senate Banking Committee. Sen. Sherrod Brown, D-Ohio, said, “As the ripple effects of FTX’s collapse continue to spread, we are witnessing what can happen when a bank overreliance on a dangerous, unpredictable industry like cryptocurrencies.”
“I’ve been worried that banks’ involvement with cryptocurrencies would spread risk across the financial system, with taxpayers and consumers paying the price,” he said. Thus, I continue collaborating with my legislative colleagues and banking authorities to implement robust crypto-risk protections for our financial system.”
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