silvergate bank declares bankruptcy amidst no crypto support

Silvergate Capital Corporation, the parent company of crypto-friendly bank Silvergate, has filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware after it failed to find any support within the crypto industry.

According to the bankruptcy petition, Silvergate has assets listed at between $100 million and $500 million, with liabilities ranging from $10 million to $50 million. The filing also includes Silvergate’s affiliates, Silvergate Liquidation Corporation and Spring Valley Lots LLC.

The bankruptcy came more than a year after Silvergate closed its operations amid liquidity issues. As per Marketscreener, administrative claims, statutory fees, Secured Claims, professional fee claims, priority tax claims, other priority claims, Subordinated Notes Claims, General Unsecured Claims, Ad Hoc Preferred Stockholder Group Expenses and Bhatia Litigation Class Claims of $10 million shall be paid in full in cash.

However, claims focused on common stock and securities lawsuits are set to be completely canceled. Additionally, some stockholders will receive partial payments based on their shares.

Last year in March, Silvergate had announced it would voluntarily liquidate its subsidiary, Silvergate Bank, due to growing interest rates and the stringent regulatory scrutiny post FTX debacle. The firm suffered from deteriorating reputation and a damaged goodwill within the crypto market due to its proximity with FTX, leading to SEC filing case against it on the alleged charges of helping FTX carry out fraudulent activities.

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