After being financially devastated by the instability in digital assets, cryptocurrency-focused lender Silvergate announced that it is ceasing operations and would liquidate the bank.
Silvergate stated on Wednesday that it thought a voluntary liquidation of the bank and winding down of operations was appropriate given the recent regulatory and industry developments. “Full repayment of all deposits” is part of the bank’s plan.
The stock of Silvergate has dropped 97% from its high in November 2021; this trend is consistent with that of the overall crypto market.
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The cryptocurrency sector has been rocked by a spate of scandals and bankruptcies in 2022, including the unexpected collapse of Sam Bankman-corporate Fried’s empire in November. The market as a whole is now only worth roughly $1 trillion, down from a $3 trillion valuation.
The announcement on Wednesday comes a week after Silvergate warned that it would cease operations and postponed its annual filing with the SEC. The bank’s largest cryptocurrency industry clients, including Coinbase and Paxos, withdrew their deposits in response to that revelation.