Silvergate discusses with FDIC officials on how to avoid shutdown: Report

US federal officials have been in discussions with Silvergate Capital’s management to avoid a shutdown, Bloomberg News reported on Tuesday, citing people familiar with the matter. Shares of the crypto-focused bank rose about 5% in after-market trading.

Last week, the bank warned that it was delaying its annual report and said it was assessing its ability to continue as a going concern.

The company late Friday said that effective immediately, it had made a “risk-based decision” to stop production. Silvergate Exchange Networkenables round-the-clock transfers between investors and electronic money Exchanges, unlike traditional bank wire, can often take days to settle.

The report said US regulators were dispatched to Silvergate’s headquarters as the company sought to stay in business.

The report says one possible option involves aligning investors in the crypto industry to help Silvergate increase liquidity.

Federal Deposit Insurance Bloomberg News adds that (FDIC) judges have been authorized by the Federal Reserve to visit the offices of Silvergate, the main federal watchdog, and that the judges are reviewing the company’s books and records. company.

FDIC judges visited the company’s offices in La Jolla, California last week, they told Bloomberg News, adding that the company has yet to make a decision on how to deal with the turmoil. its deepening finances.

The FDIC and Silvergate were not immediately available for comment.

Silvergate tried to allay investor concerns about its future when it reported a loss of $1 billion (roughly Rs 12,300 crore) in the fourth quarter following the collapse of crypto exchange Sam Bankman-Fried FTX in November spurred investors to withdraw $8 billion (approximately Rs 65,700 crore) in bank deposits in the last three months of the year.

© Thomson Reuters 2023

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