Silvergate Capital Corp’s stock price tanked by almost 40% in after-hours trading on Wednesday. This was the market reaction to a statement from the company that the crypto bank was shutting down its operations.
They reported a loss of $1 billion in their fourth-quarter results and companies like Coinbase and Binance were quick to announce that they had no money held with Silvergate. Other customers rushed to pull out their deposits in troves. This mass withdrawal forced the company to sell off its securities investments, on which they incurred losses, in order to cover the withdrawals.
Silvergate, the second largest bank for crypto companies, has promised that all deposits will be paid in full as the company prepares to liquidate.
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