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Silvergate Capital Corporation, the holding company for crypto-friendly Silvergate Bank, announced on Wednesday its decision to cease operations and voluntarily liquidate its bank.
Shares of Silvergate (SI) have taken a significant hit, trading down over 35% on the Nasdaq in the last seven days, in light of the recent regulatory approach by authorities to the industry.
Shares of Silvergate Bank, under the ticker SI, have lost more than 5% of their value in the last 24 hours, trapped in a sideways price action between $4.9 and $5.9 per share, following the crypto crackdown by the Securities and Exchange Commission (SEC) to over-regulate the industry.
The digital asset bank has confirmed investors’ doubts about its viability after announcing on Friday that it had made a “risk-based decision” to shut down the Silvergate Exchange Network, leading to the decision to cease operations. Silvergate states:
This press release contains forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance
Silvergate Shares Are Doomed For The Worst
Silvergate shares fell more than 2% on Friday after the opening bell on the Nasdaq Stock Market, after closing 0.9% above the $5.70 mark.
Moreover, on Thursday, SI shares suffered what investors feared after the public feuds between the SEC and the crypto-friendly bank. Falling to a record low as they ended the trading day down more than 95% from the all-time high of $220 per share in November 2021.
Previously, Silvergate suffered breakups with former major partners after the warning that the bank emitted from the ongoing concerts of the ability to continue its operations, which caused the sale of additional debt at a loss; Coinbase Global and Galaxy Digital dropped the company as their banking partners, according to a Reuters report.
In addition, stablecoin issuer Paxos, the former issuer of Binance’s BUSD, and Circle, the issuer of USDC stablecoin, suspended their partnership with the bank and exchanged Gemini, Cboe’s, and Bitstamp.
After battling to stay afloat, SI shares have been hit by the company’s disclosed problems, with the genesis being the FTX case, where investors withdrew more than $8 billion in deposits from the bank in the last months of 2022.
SI shares have closed the trading day on the Nasdaq at $4.91, with no hope for it to recover after the announcement by Silvergate Corporation.
Feature image from Unsplash, chart from TradingView.com.
