Silvergate reportedly talks with FDIC on ways to avoid shutdown

U.S. banking regulators have reportedly been sent to their Silvergate headquarters in La Jolla, Calif., to look for ways to save crypto-friendly banks from possible closure.

Bloomberg report on March 7 Quote “People familiar with the matter” said Federal Deposit Insurance Corporation (FDIC) officials are talking with management about how to save the company.

The FDIC is an independent government agency in the United States charged with overseeing the safety, integrity, and consumer protection of financial institutions. situation.

US regulators have been dispatched to Silvergate Capital’s headquarters as the troubled crypto-friendly bank seeks ways to stay in business. https://t.co/fq2sPWS7nV

— Bloomberg Crypto (@crypto) March 7, 2023

FDIC examiners reportedly arrived at the company’s headquarters last week to review the company’s books and records, one of the sources said.

However, no decision has yet been made on how to address the financial woes, and the FDIC’s involvement does not imply that a solution cannot be reached without the input of regulators, another source said. suggests.

Related: Impact of Silvergate Collapse on Cryptocurrencies — Watch Market Report Live

Silvergate’s stock price plunged last week after the company announced a delay in filing its 10-K report, a document that provides a comprehensive overview of the company’s business and financial situation.

At the time, the company said it was “assessing 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 months or so. .

Uncertainty about Silvergate’s financial condition has raised concerns about a future bankruptcy filing. Silvergate shares plummeted more than 50% to $5.72 on the New York Stock Exchange on March 2, while cryptocurrency prices plummeted across the board.

1/ We maintain relationships with multiple banking partners. We are sensitive to your concerns regarding Silvergate and are in the process of rolling back certain services at Silvergate and informing our customers. Otherwise, all Circle services, including USDC, are working as normal.

— Circle (@circle) March 2, 2023

Within 24 hours of the 10K delayed announcement, Coinbase, Circle, Bitstamp, Galaxy Digital, and Paxos all mentioned scaling back their respective partnerships with Silvergate. MicroStrategy, Binance, and Tether have also denied any material exposure to banks.

As of this writing, Silvergate’s stock is at $5.21, down 70% over the past month. according to to Google Finance.