Bitcurrent Ponzi scheme
Representations of various cryptocurrencies – Bitcoin, Ethereum, DogeCoin, Ripple, Litecoin – are placed on PC motherboard. REUTERS/Dado Ruvic/Illustration

Crypto-focused bank Silvergate Capital said on Wednesday it planned to repay deposits and voluntarily liquidate following a massive loss.

The decision comes after the San Diego company flagged risks to its ability to continue operating as a going concern earlier this month, fanning liquidity concerns that sparked a rout in the crypto market.

“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.

“The bank’s wind down and liquidation plan includes full repayment of all deposits,’ according to the statement.

Silvergate had been trying to ease investor concerns over its future after it reported a $1 billion loss for the fourth quarter following the collapse of Sam Bankman-Fried’s crypto exchange FTX in November.

But multiple partners of the bank, including high-profile firms like Coinbase Global and Galaxy Digital, severed ties last week.

Silvergate said it hired Centerview Partners as financial advisor, Cravath, Swaine & Moore as legal advisor, and Strategic Risk Associates to provide transition project management assistance.

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Chris Jennewein

Chris Jennewein is Editor & Publisher of Times of San Diego.