Silvergate Capital announces the suspension of Series A preferred stock dividends Silvergate Capital announces the suspension of Series A preferred stock dividends
The move sent Silvergate Capital (SI) share price tumbling more than 10% today
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Updated: Jan. 27, 2023 at 8:39 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Silvergate Capital, the parent company to the crypto bank Silvergate, has announced it will be suspending Series A preferred stock dividends as it hopes to restructure following heavy loses and FUD surroundings its exposure to several now defunct crypto entities.
The company said Jan. 27 that it was doing so to maintain liquidity on its balance sheet, all the while navigating a series of exposures to several of crypto’s most toxic entities, including FTX and Genesis.
CEO of Silvergate Capital Alan Lane said in a statement:
In response to the rapid changes in the digital asset industry during the fourth quarter, we took commensurate steps to ensure that we were maintaining cash liquidity in order to satisfy potential deposit outflows, and we currently maintain a cash position in excess of our digital asset related deposits.
Silvergate Capital Corp. is traded on the New York Stock Exchange under the ticker SI. The Silvergate bank, founded in a small California town in 1988, rose to prominence as the banker of choice for many now null crypto firms, including FTX, who had an estimated $1.2 billion worth of deposits held in the bank at the time of its collapse last November. While Genesis, the digital asset prime brokerage founded by Digital Currency Group CEO Barry Silbert, now insolvent, also had assets with the bank totaling $2.5 million, it was reported.
Compounding matters even further was a bank run that saw $8.1 billion worth of deposits withdrawn earlier this month in a decline of roughly 68%, forcing Silvergate to liquidate assets and lay off 40% of its staff. At the time, the company said there was a “crisis of confidence across the ecosystem.”
By the end of 2022, Silvergate said in a statement that they held more than $150 million worth of assets from customers who had filed for bankruptcy protection.
After going public in 2019, shares of Silvergate rose to a high of $222 in November 2021, the same month, Bitcoin peaked at over $65,000 USD. Since then, Silvergate Capital shares have fallen to $12.68, more than 90% below their all-time high.
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Posted In: Banking, Bankruptcy
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Dorian Batycka
Dorian Batycka is a journalist interested in art and technology. He has previously contributed to CoinDesk, Decrypt, Artforum, Artnet News, the Art Newspaper, and many others. He can be found on Twitter and Instagram @temp_projects, where he often memes his way through current financial and art news, scandals, and events.
In this article
Genesis
Genesis is an institutional digital asset markets and a full-service digital currency prime brokerage providing a single point of access for select qualified individuals and global institutional investors.
Silvergate
Silvergate is a Federal Reserve member bank and the leading provider of innovative financial infrastructure solutions and services for the growing digital currency industry, based in La Jolla, California.