Silvergate Capital Files for Bankruptcy

According to Financefeeds, Silvergate Capital, the parent company of crypto-friendly bank Silvergate, has filed for Chapter 11 bankruptcy protection in Delaware. The bankruptcy filing indicates the company has assets between $100 million and $500 million, and liabilities between $10 million and $50 million.

In March 2023, Silvergate Capital announced it would voluntarily liquidate its subsidiary Silvergate Bank due to 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.

This 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 has closed its enforcement action against Silvergate Capital after Silvergate Bank completes its liquidation plan, repays deposits, and ceases banking operations.

Previously, the SEC filed a lawsuit against Silvergate Capital in a federal court, alleging securities fraud. The SEC said Silvergate misled investors about its bank secrecy practices, anti-money laundering compliance program, and its deteriorating financial condition after the 2022 FTX collapse.