Shares of embattled crypto bank Silvergate Capital (NYSE:SI) plunged after-hours Wednesday after the company said it will wind down operations and voluntarily liquidate the bank.
“In light of recent industry and regulatory developments, Silvergate believes that an orderly wind-down of Bank operations and a voluntary liquidation of the Bank is the best path forward,” the company said in a statement on the matter.
The news follows reports on Tuesday evening that officials from the Federal Deposit Insurance Corp. (FDIC) have been sent to the company’s headquarters in La Jolla, California to discuss emergency arrangements.
Silvergate said the wind-down and liquidation plan includes full repayment of all deposits.
Silvergate also said it is considering how best to resolve claims and preserve the residual value of its assets, including its proprietary technology and tax assets. The company is working with Centerview Partners LLC as financial advisor. Meanwhile, Cravath, Swaine & Moore LLP is acting as legal advisor and Strategic Risk Associates is providing transition project management assistance.
Shares of Silvergate plunged 33% after-hours on the news to $3.26. Shares had traded as high as $162.65 earlier in the year before its implosion, triggered in part by the collapse of FTX.
Short sellers have profited handsomely from the company’s demise, claiming that Silvergate knowingly accepted customer-wired funds from FTX and other crypto exchanges in the names of other entities. In recent weeks, various customers have pulled away from Silvergate.
Source: Cryptocurrency - investing.com
