Silvergate reportedly talks with FDIC on ways to avoid shutdown
Regulators are reportedly in urgent talks with Silvergate to find ways to save the crypto-friendly bank from a possible shutdown.
Citing “people familiar with the matter,” Bloomberg reported on March 7 that Federal Deposit Insurance Corporation officials have been discussing with management ways to salvage the company.
The FDIC is an independent government agency in the U.S. tasked with supervising financial institutions for safety, soundness and consumer protection, its website states.
US regulators have been sent to the headquarters of Silvergate Capital, as the troubled crypto-friendly bank looks for a way to stay in business https://t.co/fq2sPWS7nV
— Bloomberg Crypto (@crypto) March 7, 2023
The FDIC examiners arrived at the firm’s headquarters last week and have since been reviewing the firm’s books and records, one of Bloomberg’s sources said.
However, a decision has yet to be made on how it would deal with its financial strife, nor does FDIC involvement suggest a solution can’t be reached without the regulator’s input, another source said.
Related: Impact of the Silvergate collapse on crypto — Watch The Market Report live
Silvergate stock plummeted last week after the company announced a delay in the filing of its 10-K report — a document that would provide a comprehensive overview of the company’s business and financial condition.
At the time, it said it was “evaluating the impact” of market volatility and several high-profile bankruptcies in 2022 on “its ability to continue as a going concern” over the next 12 or so months.
Uncertainty over Silvergate’s financial situation has raised fears of an upcoming bankruptcy filing, which could prove costly for the rest of the industry. Silvergate stock plummeted over 50% on the New York Stock Exchange on March 2 to $5.72, while crypto prices took a beating across the board.
1/ We maintain relationships with several banking partners. We are sensitive to the concerns around Silvergate and are in the process of unwinding certain services with them and notifying customers. Otherwise, all Circle services, including USDC are operating as normal.
— Circle (@circle) March 2, 2023
Within 24 hours after its 10-K delay announcement, Coinbase, Circle, Bitstamp, Galaxy Digital and Paxos announced a scaling back of their individual partnerships with Silvergate. MicroStrategy, Binance and Tether all denied any meaningful exposure to the bank.
As of the time of writing, Silvergate stock was priced at $5.21, down 70% over the past month, according to Google Finance.
Cointelegraph reached out to Silvergate for comment but did not receive an immediate response.
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