The Next Please: Crypto-Friendly U.S. Silvergate Bank May File For Bankruptcy Protection Soon!

Silvergate Bank in troubles
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According to several online news platforms, the crypto-friendly California bank Silvergate might soon file for bankruptcy protection. The short-seller Marc Cohodes predicts the bankruptcy filing could arrive before Monday, and its CEO Alan Lane could face federal charges. The publicly traded bank has delayed the release of its 10-K annual report for 2022. In an SEC filing, the bank said it was not sure it could survive as a “going concern.”

The crypto-friendly Silvergate bank faces heavy losses, a bank run, and numerous regulatory issues after the FTX collapse. Sam Bankman-Fried‘s Alameda Research and FTX were among Silvergate’s biggest customers. Following the FTX bankruptcy, Silvergate‘s customers withdrew over $8 billion in deposits. Large crypto schemes, including Coinbase, announced they would terminate their relationship with the bank.

Allegedly, Silvergate makes up 61.7% of total, worldwide “cryptoasset prudential exposures.”

Silvergate also faces class-action lawsuits. Harmed investors allege Silvergate failed to warn them about its deficiencies in anti-money laundering protocols.

On Tuesday, Silvergate was the most shorted US stock on the NYSE, with 81% of available shares sold short. The stock price crashed from $13.33 yesterday to close at $5.72 today.

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