Crypto-friendly bank Silvergate says it’s decided to wind down operations and liquidate, making it the latest company to be leveled by the collapse of FTX.
The news triggered a 36% after hours crash in the bank’s stock, and pushed Bitcoin (BTC) from $22,100 to $21,777 at time of publishing.
The California-based bank has about $11 billion in assets and says it will fully repay all deposits in an orderly fashion.
Silvergate is also shutting down its SEN platform, which allowed institutions to quickly swap crypto and cash 24 hours a day, without the need for slow and cumbersome bank wires.
Silvergate says its decision to wind down is the best path forward due to “recent industry and regulatory developments.”
The move will likely cause a number of industry players to turn to New York-based Signature Bank, which is another key banking partner in the industry.
Silvergate is the latest domino to fall after the collapse of the offshore Bahamas-based crypto exchange FTX, which essentially stole and gambled customer deposits by handing them to its hedge fund, Alameda Research.
FTX founder Sam Bankman-Fried is accused of being the puppet master behind one of the largest financial frauds in history.
After being expedited from the Bahamas to the US, Bankman-Fried was released on a $250 million bond.
He has pleaded not guilty and faces up to 115 years in prison for conspiracy to commit wire fraud on customers, wire fraud on customers, conspiracy to commit wire fraud on lenders, wire fraud on lenders, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering and conspiracy to violate U.S. campaign finance laws.
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inboxFeatured Image: Shutterstock/Who is Danny