Mar 09, 2023 12:30:00

Cryptocurrency service collapses the main bank ``Silver Gate'', voluntarily settles and closes the banking business

Silvergate Capital Corporation, the holding company of Silvergate Bank in the United States, announced on March 8, 2023 that it would reduce its operations and return bank deposits. Silvergate focused on cryptocurrency-related services and grew significantly at one point, but its business deteriorated due to the depreciation of cryptocurrencies and

the collapse of FTX, a cryptocurrency exchange, and its business continuity was at stake.

Silvergate Capital Corporation Announces Intent to Wind Down Operations and Voluntarily Liquidate Silvergate Bank | Business Wire
https://www.businesswire.com/news/home/20230308005795/en/Silvergate-Capital-Corporation-Announces-Intent-to-Wind-Down-Operations-and-Voluntarily-Liquidate-Silvergate-Bank

Crypto bank Silvergate to shut down amid crisis
https://www.axios.com/2023/03/08/crypto-bank-silvergate-liquidated

Silvergate has collapsed - The Verge
https://www.theverge.com/2023/3/8/23631320/silvergate-wind-down-liquidiation-announcement

In a March 8 announcement, Silvergate said, 'In light of recent industry and regulatory developments, we believe an orderly wind-down and voluntary liquidation of our banking operations is the best course of action. The plan includes full repayment of deposits, ”he said, showing plans to end banking.

Founded in Southern California as a savings and loan association in 1988, Silvergate shifted its focus to cryptocurrencies in 2013 and has grown significantly along with the development of the cryptocurrency industry.

However, his devotion to cryptocurrencies became apparent, and he ran into a shortage of funds as the amount of deposits decreased significantly due to the bank run following the collapse of FTX. At the end of 2022, customers are said to have withdrawn $8 billion (¥1,096 billion) from Silvergate.

In order to make up for this loss, Silvergate received $ 4.3 billion (about 589 billion yen) as a mortgage advance from

the Federal Home Loan Bank , but it did not rebuild the business. In addition, in 2023, the U.S. government has shown a stance of sharply strengthening regulations and crackdowns on cryptocurrencies, adding to the financial difficulties of Silvergate.

After that, Silvergate decided on March 3, 2023 to abolish its main service called Silvergate Exchange Network, which exchanges virtual currency and legal currency. Less than a week later, the bank was forced to close.

According to overseas news media Axios, bank business liquidations are overwhelmingly announced on Friday afternoon. This is because the Federal Deposit Insurance Corporation , the independent agency of the U.S. government responsible for protecting bank deposits, is taking full advantage of the weekend to bolster bank assets as much as possible and reassure depositors before the next business day. However, the fact that Silvergate came out with a plan to close on Wednesday speaks to how quickly Silvergate collapsed, Axios points out.

``The collapse of Silvergate will undoubtedly come under scrutiny from parliamentarians, especially those concerned about the negative impact of cryptocurrencies on traditional financial sectors,'' said IT news site The Verge. He expressed the view that the chain of collapse due to the decline of virtual currencies has finally reached non-cryptocurrency companies, and that the tightening of virtual currencies will be further strengthened in the future.