Silvergate, one of the most famous crypto banks, decided to shut down its operations. The bank has blamed regulatory frameworks and improper guidelines for its wind down.
On 8 March, Silvergate Capital, the holding company of Silvergate bank, issued a detailed press release. In the statement, they informed their customers about the shutdown. The company has decided to liquidate with full payment of deposits, and the company is considering resolving claims and preserving the residual value of assets.
Silvergate has hired Centerview Partners LLC as financial advisor and Cravath, Swaine & Moore LLP is acting as legal advisor and Strategic Risk Associates is providing transition project management assistance.
On 7 March, White House Press Secretary Karin Jean-Pierre said that they will continue to monitor the reports. Silvergate’s decision to shut down its operations comes after it faced significant financial volatility in recent weeks.
After the discontinuation of Silvergate Exchange Network (SEN) on 3rd March, the company was in a shaky situation. The company also stated that depositional services will be continued as this is a wind-down process. They have also promised an orderly wind down by the law.
Experts believe that Silvergate’s decision is quite anticipated because of the risk associated with it. United States Senator Elizabeth Warren has warned other players in the industry to take care of their customers. She also criticized regulators for their failure in identifying the flaws in these banks. Additionally, in her statement, she added that now customers must be made regulators of their own.
The Silvergate bank issue has alarmed people about the greater risk of collapse. According to Senator Elizabeth Warren, American Taxpayers need to take off on their own because regulatory bodies are not working properly and be ready to bear the burden of these possible collapses.
