According to BlockBeats, in a new bankruptcy filing on September 23, executives responsible for the liquidation of crypto-friendly Silvergate Bank's parent company said that despite the downturn in the cryptocurrency industry and rising interest rates, the bank is stable, able to meet regulatory capital requirements, and able to continue serving customers who have retained deposits.
However, in 2023, sudden regulatory changes from the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) indicated that, in the first quarter of 2023, these agencies would no longer tolerate banks with significant numbers of digital asset customers. This ultimately prevented Silvergate Bank from continuing its digital asset-focused business model.
Elaine Hetrick, chief administrative officer of Silvergate Capital Corporation, provided a timeline in the bankruptcy filing that led to the closure of Silvergate Bank on March 8, 2023. That date was two days before Silicon Valley Bank closed and four days before Signature Bank was taken into regulatory custody.
The document stated that Silvergate's consolidated operations showed a net loss of $948.7 million for the year ended December 31, 2022, compared to a net income of $75.5 million for the year ended December 31, 2021. The loss was primarily due to the sale of long-term securities amid rising interest rates.
