Silvergate seeks a lifeline from the authorities

The crypto-friendly bank Silvergate must find a solution to get to stay afloat. From discussions in this sense have been conducted with the Federal Deposit Insurance Corp.. Several options are on the table.

Nothing goes for Silvergate Bank. The situation of the American bank, which served large players in the ecosystem cryptoseems very worrying. In December, its leaders assured however to have important liquidities.

The optimistic speeches are no longer valid. Silvergate even sought advice from the American authorities. According to Bloombergofficials from the Federal Deposit Insurance Corp (FDIC) were meeting with bank executives as early as last week.

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FDIC on board of directors

These exchanges at the Silvergate, California headquarters are aimed at stopping scenarios to avoid the closure of the bank. The government agency, whose responsibilities include guaranteeing bank deposits, did not comment.

Various measures are reportedly under consideration. One of them would be to make call on investors from the crypto sector In order to increase the bank’s liquidity. In the middle of the bear market, success is not assured.

According to sources at BloombergSilvergate has reportedly not made any decisions yet and internal deliberations are continuing. The financial organization has already lost the confidence of many of its customers, including giants like Coinbase.

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Silvergate’s deposits cut in half

And recent announcements have further accelerated withdrawals. On December 31, Silvergate had $6.3 billion in deposits. At the end of the previous quarter, that amount was $13.2 billion.

The crypto-friendly bank has not been spared by the crisis and bankruptcies, including that of FTX. Its crypto activity with institutions has suffered the full force of the bear market and the mistrust of investors.

At the end of last week, the financial institution announced the closure of Silvergate Exchange Network (SEN). Prized by its crypto customers, the network allowed for the transfer of funds outside of business hours.

The decision was officially motivated by the risks. All other deposit-related services remain operational, the company said in its communication.

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