California-based Silvergate Capital and Bank has been ordered to cease operations before board of rulers of Federal Reserve System and Administration of financial protection innovation of California.
Fed of San Francisco and management of Financial protection and innovation found Many defects during recent inspections. This payment order issued under the California Federal Deposit Insurance Act financial code.
Since at least 2013, Silvergate has offered cryptocurrency asset its banking sector and financial services. Silvergate Exchange Network (SEN), close by real- Time payments network Within Silvergate Bank, he was crucial to the company business Plan.
However, recently eventslike collapse of FTX Trading Ltd and its subsidiary, Alameda Research, led to significant declines in Deposits from crypto asset linked clients. this, in Role, caused Funding and liquidity pressures on bank and a decline in Income generating activities.
Silvergate financial problems
On March 1, Silvergate Capital Corporation announced that it would delay filing its annual report with an assessment of its ability to continue as a going concern, and reassess it. business plansand get a review financial formulations.
On March 7, A.J board of Directors of Silvergate Bank has agreed to the voluntary liquidation of the FDIC of the bank outside of guard for guarantee back of all depositors money.
The Commission of The Conservatives, DFPI and Silvergate entered into a cease-and-desist order ensure Organized liquidation of Silverjet and compliance with All relevant laws.
The order states that the company must do so use that it financial And administrative resources to strengthen the bank that it shall submit a self-liquidation plan for the organizing wind-down of Processes that must be protected cash assetsand that court permission must be obtained before certain distributions can be made of capital or involvement in new business activities.
command – request also It requires constant cooperation with regulatory Agencies such as supply information, documents and certificates about current Investigations and confirmation of preservation of records.
Silvergate Capital Corporation and the insolvent Silvergate Bank agreed to judgment and disregarded further legal action against that it terms. it will continue in force up to the board of The governors and the DFPI amend or revoke the order.