Crypto bank Silvergate says it'll shut down as the market meltdown claims its 1st mainstream casualty

Crypto bank Silvergate says it'll shut down as the market meltdown claims its 1st mainstream casualty

·         Silvergate Capital said Wednesday it intends to divest its assets and close its book business.

·         Banks Accepting Crypto Has Big Impact Of Rising Loans, Boosting FTX Crash.

·         Silvergate shares fell 43% below $3 in early trading on Thursday.

 

Silvergate Capital has been one of the victims of the crypto crisis, saying that it planned to deliberately divest its assets and close its book bank. The move comes after Silvergate - which is a bank for big names in crypto - warned last week that it is considering its ability to continue trading, due to growing concerns, including the upcoming review of the US Equity Division about it.

 

"Given the progressive industry and the ongoing government programs, Silvergate is confident that the effective reduction in banking activity and the deliberate liquidation of banks is the best way," Silvergate Capital, organization and -held by Silvergate Bank, said on Wednesday. The organization said it plans to issue full refunds to all stores.

 

Silvergate has established itself as the largest crypto-focused bank in the United States, with a customer base of $14 billion. Either way, the combination of a sharp increase in central bank interest rates and the fall of FTX in November casts a shadow over its future.

 

High costs to acquire fueled a sell-off in risky assets last year, with crypto prices plummeting. Silvergate is also the main financial institution for FTX's unsecured business and its sister exchange Alameda Exploration, FTX's customers transfer money directly to the bank while saving money.

 

Consumers have rushed to withdraw less than $8 billion from banks since the FTX collapse. An unaudited financial report covering the last quarter of 2022 showed Silvergate had just $4.6 billion as of Dec. 31.

 

"As the effects of the FTX shutdown continue to fade, we see today that banks are relying on risky and unpredictable areas like digital currency," the Banking Council of the Senate, Sherrod Brown, and comments. \"I am concerned that when banks get involved in crypto, it will spread the risk to the financial system and that citizens and consumers will pay."

 

After Silvergate announced its failure last week, major crypto players such as Coinbase, Circle, Cosmic System Computerized, and Paxos are teaming up to cut ties with banks. Then, at that time, the Silvergate Trade Organization, which was the main financial network for the crypto industry that attracted investors, was closed. Last week, Exness Planner Wael Makarem warned about the consequences of the crypto market and the company.

 

"The growing fear and disillusionment of crypto-centric banks could undermine another lending trend following the debt that crypto majors have paid over the past two months," Makarem said. Insider last week. "After all, the market can be given a new price treatment while lenders can worry about the possible impact on other market participants," he said.

 

Silvergate's stock plunged 43% below $3 in early trading on Thursday, after soaring above $200 during the peak of the crypto boom in 2021.