Silvergate Bank, also known as Silver Capital Corporation, was a Federal Reserve member commercial bank and financial technology company specializing in banking for digital currency exchanges, cryptocurrency activities, bitcoin miners, institutional investors, software developers, and financial technology companies.
The bank was based in La Jolla, California, and was founded in 1988 by Derek Eisele and began its digital currency initiative in 2013. Silvergate stock went public with an IPO on November 7, 2019, and was traded on the NYSE (ticker: SI) before ceasing operations in March 2023.
Silvergate offered commercial lending and commercial banking services, including business banking accounts, commercial real estate, mortgage warehouse, and cash management. Silvergate also offered a suite of digital financial infrastructure, payments, lending, and funding solutions and services.
Its target audience included companies and investors in the digital currency industry, and its solutions were intended to enable the growth of digital currency markets and digital commerce. Silvergate operated its real-time payments platform, known as the Silvergate Exchange Network, as well as SEN leverage, institutional custody services, and banking APIs to create an open banking platform.
In March 2023, Silvergate announced that it was voluntarily liquidating the bank and ceasing operations. The company cited industry and regulatory developments as the reason for its decision to close. Silvergate was most likely referring to the collapses of other major crypto-related companies, such as FTX, and the scrutiny it was facing from US senators.
Silvergate is also being sued by several of its investors and is subject to several investigations. There are several class-action lawsuits, including one that claims that Silvergate mishandled the funds of FTX customers.
Silvergate Capital: A Key Player in the Bitcoin Ecosystem
Silvergate will liquidate bank, wind down operations
March 8, 2023
Veteran short seller calls Silvergate a 'publicly traded crime scene' and predicts its imminent closure
March 4, 2023