Silvergate Capital Files for Bankruptcy Protection

Golden Finance reports that Silvergate Capital, the parent company of crypto-friendly bank Silvergate, has filed for Chapter 11 bankruptcy protection in a Delaware court. The company estimates its assets to be between $100 million and $500 million, with liabilities ranging from $10 million to $50 million.

The bankruptcy stems from liquidity issues and a severe blow to its reputation following the collapse of cryptocurrency exchange FTX. Silvergate Bank, a subsidiary of Silvergate Capital, was heavily involved with the crypto industry. However, the company has faced significant challenges due to regulatory scrutiny sparked by the FTX scandal.

The Securities and Exchange Commission (SEC) has accused Silvergate of assisting FTX in fraudulent transactions, resulting in hefty fines and restrictions on former executives. Silvergate has agreed to pay $63 million to settle charges with the SEC, the Federal Reserve, and California regulators.