- Silvergate was able to wind down its activities, reimburse clients, and cease to be a bank.
- The collapse of Silvergate Bank in March 2023 was accompanied by extensive conjecture.
On July 26, 2024, the Federal Reserve Board stated that Silvergate Bank and the Silvergate Capital Corporation would not be subject to any further enforcement actions. The notice states that the board’s enforcement action was halted since Silvergate was able to wind down its activities, reimburse clients, and cease to be a bank.
The collapse of Silvergate Bank in March 2023 was accompanied by extensive conjecture about the bank’s terrible financial status. With 72% of the company’s equity borrowed to establish short positions, Silvergate’s stock was the second-most shorted stock on Wall Street in February 2023, only one month earlier.
Tragic Collapse
Unfortunately for Silvergate, the bank delayed the publication of their 10-K form until early March 2023, which only made issues worse. All publicly traded corporations in the US are legally obligated to file a Form 10-K. This form gives investors information about the company’s financial health. Stock of Silvergate dropped 31% as a result of the delayed disclosure.
Not long after these warning signals appeared, on March 8, 2023, Silvergate went bankrupt. Claiming losses due to FTX’s demise and large customers withdrawing their money from the affected institution. The Federal Reserve Board of Governors oversaw the bank’s self-liquidation strategy. In order to make sure it reimbursed customers as much as possible.
Despite regulatory control, some damaged parties were not happy with the disclosed liquidation plan. And lawsuits were brought against the now-defunct bank. A number of senior personnel, including CEO Alan Lane, departed the firm in August 2023. Due to the ongoing liquidation and increasing legal issues.
Highlighted Crypto News Today:
Ripple’s XRP-Powered Payment Platform Expands to Over 80 Markets
