Silvergate Capital Corporation, the parent company of Silvergate Bank, has filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the District of Delaware.
The company reported assets of between $100 million and $500 million and liabilities of between $10 million and $50 million, according to a filing on September 17. The bankruptcy filing also includes two Silvergate affiliates, Silvergate Liquidation Corporation and Spring Valley Lots LLC.
Silvergate’s restructuring plan, outlined in the bankruptcy filing, proposes to fully pay off certain types of debt, including administrative fees, taxes, and other priority claims such as secured loans and professional fees. In contrast, certain claims related to common stock and securities lawsuits would be fully discharged. Silvergate’s intercompany debt would be proposed to be reinstated, with preferred shareholders receiving a payment based on their holdings.
The bankruptcy filing comes 18 months after the bank ceased operations due to liquidation difficulties. In March 2023, the parent company announced its decision to voluntarily liquidate its cryptocurrency subsidiary and affiliate, Silvergate Bank . The cause was cited as challenges in the banking system related to rising interest rates and increased scrutiny of cryptocurrency companies following the collapse of FTX in November 2022.
Following the incident, the bank, which has close ties to the cryptocurrency industry, saw a significant decline in trust. In July, the U.S. Securities and Exchange Commission sued Silvergate Capital for allegedly facilitating fraud at the FTX exchange. However, later that month, in a separate enforcement action, the Federal Reserve Board cleared the bank of all charges, asserting that Silvergate had successfully shut down operations and reimbursed customers.
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Annie
According to Cointelegraph
