Synopsis The decision to shutter the bank comes after the company warned last week that it was evaluating its ability to operate as a going concern, disclosing that it had sold additional debt securities this year at a loss and that further losses mean the bank could be "less than well capitalised. " Agencies The dire outcome for Silvergate, one of the crypto industry's favored banks, shows the extent of the impact on the digital asset industry from the downfall of FTX Crypto-focused bank Silvergate Capital Corp said on Thursday it planned to wind down operations and voluntarily liquidate after it was hit with losses following the dramatic collapse of crypto exchange FTX. The decision to shutter the bank comes after the company warned last week that it was evaluating its ability to operate as a going concern, disclosing that it had sold additional debt securities this year at a loss and that further losses mean the bank could be "less than well-capitalised. " The dire outcome for La Jolla, California-based Silvergate, one of the crypto industry 's favored banks, shows the extent of the impact on the digital asset industry from the downfall of FTX which filed for bankruptcy in November after failing to cover customer withdrawals . In a statement, Silvergate said the decision to wind down its bank was "the best path forward" in light of "recent industry and regulatory developments. " Its wind-down and liquidation plan includes full repayment of deposits, the bank added. Multiple partners of the bank, including high-profile firms such as Coinbase Global Inc and Galaxy Digital, severed ties with Silvergate last week. After Silvergate's statement, crypto exchange Coinbase said it has no client or corporate cash at Silvergate, while Binance chief Changpeng Zhao said the company did not have any asset losses at Silvergate. Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories Silvergate reported a $1 billion loss for the fourth quarter as investors raced to withdraw more than $8 billion in deposits. Silvergate has retained Centerview Partners LLC as a financial adviser and Cravath, Swaine & Moore LLP as a legal adviser, the bank said in a statement. Founded in 1988, Silvergate ventured into crypto in 2013. The bank had also operated a mortgage warehouse business, but announced in December that it would be winding down that division, citing the rising interest rate environment and reduction in mortgage volumes. Last week, Silvergate discontinued the Silvergate Exchange Network , its crypto payments network and one of its most popular offerings. That network enabled round-the-clock transfers between investors and crypto exchanges, unlike traditional bank wires, which can often take days to settle. While risks of contagion are minimal, given that Silvergate has said it will repay depositors and has performing loans, the loss of the Silvergate Exchange Network is disappointing, said Ram Ahluwalia, the chief executive officer of Lumida Wealth, an investment adviser that specialises in digital assets. "It's more of a strategic loss of critical infrastructure for crypto," he said. The Federal Deposit Insurance Corp (FDIC) declined comment on Wednesday when asked about the bank's failure beyond saying that it does not regulate the bank or the holding company. Bloomberg earlier reported the FDIC had been discussing with Silvergate ways to avoid shutdown. Federal prosecutors in Washington are probing the company and its dealings with FTX and trading firm Alameda Research. In January, three US senators asked Silvergate for details about its risk management and FTX. In a statement, the California Department of Financial Protection and Innovation, which supervised Silvergate under a state charter, said it was evaluating the bank's compliance with financial laws, as well as safety and soundness obligations, and was working with its relevant federal counterparts. Don’t miss out on ET Prime stories! Get your daily dose of business updates on WhatsApp. click here! Thursday, 09 Mar, 2023 Experience Your Economic Times Newspaper, The Digital Way! Read Complete Print Edition » Front Page Pure Politics Disruption Companies & Economy More Short-term Yields Up, Re Down After Powell Rate Signal Bond yields at the shorter end of the curve exceeded those of long-tenor sovereign debt in India while the rupee retreated Wednesday, reflecting the likelihood of outflows from local assets after the US Federal Reserve indicated rates would continue to harden. India to Top China as Walmart’s Largest Int’l Market in ’23: CFO India is likely to surpass China and emerge as the largest international market for Walmart this year, a top company executive said. Sebi Mulls PCVs to Offer Long Funding Amid allegations of fierce valuation games that drive startups to dress up numbers and venture capitalists to spin stories to investors, the idea of permanent capital vehicles (PCVs) to offer long, patient funding to unlisted outfits of Indian entrepreneurs is being explored. Read More News on Silvergate Shut down silvergate crypto focused bank silvergate ftx bankruptcy crypto industry digital asset industry coinbase binance silvergate exchange network silvergate winding down Stay on top of technology and startup news that matters. 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