SI stock plummeted after hours Wednesday after Silvergate Capital (SI) announced it will shut down operations and liquidate its subsidiary Silvergate Bank. The news comes after last week’s announcement that Silvergate delayed quarterly earnings results. The delay was so it could include greater-than-expected losses and so accountants can review unrecorded adjustments.
Silvergate is one of the biggest lenders to major crypto firms. It facilitates transfers between exchanges and market makers. Silvergate Bank’s website touted itself as “the leading bank for innovative businesses in fintech and cryptocurrency” prior to Wednesday’s announcement.
“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 wrote in a statement.
Silvergate says it will fully repay all deposits as part of its liquidation plan. And the company is considering the best path forward for resolving claims and preserving the residual value of its assets.
As of the fourth quarter, Silvergate Capital listed $11.35 billion in assets on its balance sheet.
Silvergate also announced plans to discontinue its Silvergate Exchange Network (SEN) on March 3. The platform was launched in 2018. It enables investors and institutions to transfer U.S. dollars from bank accounts to crypto exchanges. All other deposit-related services will remain operational as the company works through its wind-down process, Silvergate said.
SI stock fell more than 35% after hours Wednesday to 3.17 following the late Silvergate announcement. Shares tanked more than 76% this month between the earnings delay and the Silvergate Bank liquidation news.
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