Regulators are reportedly in urgent talks with Silvergate to find ways to save the crypto-friendly bank from a potential shutdown.
Citing “people familiar with the matter,” Bloomberg reported on March 7 that Federal Deposit Insurance Corporation officials have been discussing ways to bail out the company with management.
The FDIC is an independent US government agency charged with overseeing financial institutions for safety, soundness and consumer protection, the website said.
US regulators have been sent to Silvergate Capital headquarters as the troubled crypto-friendly bank looks for a way to stay in business https://t.co/fq2sPWS7nV
— Bloomberg crypto (@crypto) March 7, 2023
The FDIC examiners arrived at the company’s headquarters last week and have been going through the company’s books and records ever since, one of Bloomberg’s sources said.
However, a decision has yet to be made on how it will handle its financial struggles, nor does the involvement of the FDIC suggest that a resolution cannot be reached without the input of the regulator, another source said.
Related: Impact of Silvergate’s collapse on crypto — Watch The Market Report live
Silvergate shares plummeted last week after the company announced a delay in filing its 10-K report — a document that would provide a comprehensive overview of the company’s business and financial condition.
At the time, it said it was “assessing the impact” of market volatility and several high-profile bankruptcies in 2022 on “its ability to maintain its going concern” over the next 12 months.
Uncertainty about Silvergate’s financial situation has led to fears of an impending bankruptcy filing, which could cost the rest of the industry dearly. Silvergate shares plummeted more than 50% on March 2 on the New York Stock Exchange to $5.72 as crypto prices took a beating across the board.
1/ We maintain relationships with various banking partners. We are sensitive to the concerns surrounding Silvergate and are in the process of resolving certain services with them and notifying customers. Otherwise, all Circle services, including USDC, are operating normally.
— Circle (@circle) March 2, 2023
Within 24 hours of announcing the 10,000 delay, Coinbase, Circle, Bitstamp, Galaxy Digital, and Paxos announced that they would scale back their individual partnerships with Silvergate. MicroStrategy, Binance and Tether all denied any meaningful exposure to the bank.
At the time of writing, Silvergate’s stock was priced at $5.21, down 70% from the previous month, according to Google Finance.
Cointelegraph reached out to Silvergate for comment, but did not receive an immediate response.