Previously when I published news about Silvergates stating how it is on the verge of collapse and major crypto institutional investors were pulling their money out of the bank thus worsening the situation even further.
Now the time has come when Silvergate has finally decided to shut down its business.
Is it going too quickly? The answer is no actually. The whole process of shutting down the Silkveragte would need around 2 years of projected time. The reason behind this is very simple, it was the biggest lender around the market and thus they have loans that are under recovery. Due to its collapse, the lender has to regain control of all their paid-out money along with the interests.
This is the process that will take another 2 years of the timeline to shut it completely.
The FTX really made good businesses go down the sink. It's bad to see players like that, such owners and CEOs must be banned from doing such practices.
Now the time has come when Silvergate has finally decided to shut down its business.
Is it going too quickly? The answer is no actually. The whole process of shutting down the Silkveragte would need around 2 years of projected time. The reason behind this is very simple, it was the biggest lender around the market and thus they have loans that are under recovery. Due to its collapse, the lender has to regain control of all their paid-out money along with the interests.
This is the process that will take another 2 years of the timeline to shut it completely.
The FTX really made good businesses go down the sink. It's bad to see players like that, such owners and CEOs must be banned from doing such practices.
Quote
Shares of crypto-focused companies fell on Thursday after Silvergate Capital Corp disclosed plans to wind down operations and voluntarily liquidate, as the aftermath of FTX's implosion last year reverberates through the industry.
Analysts said a complete closure of the crypto lender could take one or two years depending on how quickly outstanding loans are repaid and assets are disposed of.
Silvergate's latest move adds to a list of high-profile collapses among crypto market players since last year
The company's shares plunged 37% to $3.11, a day after hitting a record low and have lost 64% since March 1 when the company flagged a going concern risk.
"We believe this decision was made, at least in part, to help mitigate Silvergate Bank's legal liability related to FTX's bankruptcy," Wedbush analysts wrote in a note.
Silvergate did not immediately respond to a request for comment on the analysts' view.
Meanwhile, shorting in the shares of Silvergate has proved profitable for bearish investors as its shares have lost 95% of their value in the past 12 months and 72% so far this year.
Analysts said a complete closure of the crypto lender could take one or two years depending on how quickly outstanding loans are repaid and assets are disposed of.
Silvergate's latest move adds to a list of high-profile collapses among crypto market players since last year
The company's shares plunged 37% to $3.11, a day after hitting a record low and have lost 64% since March 1 when the company flagged a going concern risk.
"We believe this decision was made, at least in part, to help mitigate Silvergate Bank's legal liability related to FTX's bankruptcy," Wedbush analysts wrote in a note.
Silvergate did not immediately respond to a request for comment on the analysts' view.
Meanwhile, shorting in the shares of Silvergate has proved profitable for bearish investors as its shares have lost 95% of their value in the past 12 months and 72% so far this year.
It's actually going to be interesting to see where the collapse of this bank will lead tomorrow. As quite often in history we've seen that the ripple effects of one company can effect many unrelated and unexpected companies in a type of contagion. Let's hope it's nothing like the 2008 financial crisis which gradually got worse as new financial scandals were discovered when the first bank started to fail. Hopefully the US government and other governments are able to draw a line underneath this bank, although unfortunately it'll probably be taxpayers who end up bailing out endless greed and reckless behavior by a few individuals. From the small parts I've read, they've actually got enough assets to cover the company, they're just not liquid enough (US treasuries) to cash out big sums as quickly as customers wanted to redeem them.
