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Silvergate Talking With FDIC About How to Save Crypto-Focused Bank: Bloomberg
FDIC examiners met with Silvergate management at its headquarters in California last week.
By Nelson Wang
Updated Mar 8, 2023, 8:02 p.m. Published Mar 7, 2023, 11:00 p.m.
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Federal Deposit Insurance Corp (FDIC) officials have been consulting with executives of troubled crypto-focused bank Silvergate Capital (SI) on how to keep the company in business, according to a report from Bloomberg, citing people familiar with the matter.
One option may involve recruiting crypto industry investors to help boost Silvergate’s liquidity, according to one of Bloomberg’s sources.
STORY CONTINUES BELOW
FDIC examiners were authorized to go to Silvergate’s La Jolla, California, headquarters last week by the Federal Reserve, which is Silvergate’s main federal overseer, according to Bloomberg.
The FDIC did not immediately return a request for comment.
Silvergate shares were rising 2.5% to $5.34 in after-hours trading on Tuesday.
Silvergate announced last week it would delay the filing of its annual report because it needed to answer requests from its independent auditors and accounting firm, in addition to pending regulatory and other inquiries and investigations. The company further warned that its ability to “continue as a going concern” over the next year might be impacted by its issues.
The majority of its crypto clients subsequently announced they had left or were leaving the company, sending Silvergate's share price falling by more than 50% to an all-time low.
Silvergate also announced it was discontinuing its Silvergate Exchange Network (SEN) used by institutions to move money to crypto exchanges.
Read more: The Rise and Fall of Silvergate's Crypto Business
UPDATE (March 7, 22:19 UTC): Added additional background.
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