Silvergate Capital Files for Bankruptcy Protection in Delaware
Silvergate Capital Files for Bankruptcy
On September 19, PANews reported that Silvergate Capital, the parent company of crypto-friendly bank Silvergate, has filed for Chapter 11 bankruptcy protection in Delaware. The bankruptcy filing indicates assets between $100 million and $500 million and liabilities between $10 million and $50 million.
In March 2023, Silvergate Capital announced the voluntary liquidation of its subsidiary, Silvergate Bank, citing challenges in the banking industry stemming from rising interest rates and regulatory scrutiny following the collapse of crypto exchange FTX in November 2022. Silvergate Bank was known for its close ties to the crypto industry, and its reputation and customer confidence plummeted after the FTX debacle.
In July, Silvergate Capital reached a settlement with the U.S. Securities and Exchange Commission (SEC), the Federal Reserve, and the California Department of Financial Protection and Innovation (DFPI), agreeing to pay $63 million. The Federal Reserve stated that it ended its enforcement action against Silvergate Capital after the bank completed its liquidation plan, repaid deposits, and ceased banking operations. This came after the SEC filed a lawsuit in federal court against Silvergate Capital, alleging securities fraud. The SEC claimed that Silvergate misled investors about its bank secrecy system, anti-money laundering compliance program, and its deteriorating financial situation following the FTX collapse in 2022.