Crypto Bank Silvergate Repays All Deposit Liabilities
Silvergate Capital, a bank focused on crypto, recently announced that it has fully repaid all remaining deposit liabilities. This comes after the bank’s earlier decision to wind down its operations, with the bank now holding less than $10,000. The decision to liquidate voluntarily was made in March after incurring losses from the collapse of crypto exchange FTX, which led to a $1 billion quarterly loss for the California-based bank.
In the wake of the FTX debacle, investors pulled out more than $8 billion in deposits, prompting Silvergate to focus on implementing the Bank Liquidation. The cryptocurrency market saw a significant decrease in value, losing over a trillion dollars in 2022 due to concerns about an impending economic collapse and increasing interest rates.
Hot Take: Silvergate’s Swift Response to Losses
Silvergate Capital’s prompt action to repay all deposit liabilities and wind down its operations reflects the challenges faced by financial institutions operating in the volatile crypto market. The bank’s decision underscores the impact of major industry incidents, such as the dramatic collapse of the FTX exchange, and highlights the potential ramifications for investors and depositors.
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