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The decision followed the bank’s successful winding down of operations, which included reimbursing customers and ceasing its activities as a financial institution.
While the Federal Reserve Board responded to Cointelegraph’s request for additional information, it declined to comment specifically on the matter.
Silvergate Bank’s collapse in March 2023 marked a significant event in the financial sector.
A month prior, the bank’s stock had become the second-most shorted on Wall Street, with 72% of shares borrowed for short selling.
This intense market scrutiny was compounded by Silvergate’s delay in filing its 10-K form in early March, an annual financial report required by U.S. law.
The delayed filing led to a 31% drop in Silvergate’s stock value.
On March 8, 2023, Silvergate officially collapsed, citing financial shortfalls due to the fallout from FTX’s collapse and the subsequent withdrawal of funds by major clients.
In response, the Federal Reserve Board oversaw the bank’s self-liquidation plan to ensure that customer reimbursements were maximized.
Despite this oversight, not all affected parties were satisfied, leading to lawsuits against the defunct bank.
Amid the liquidation process and mounting legal challenges, CEO Alan Lane and other top executives left the company in August 2023.
Despite the end of the Federal Reserve’s enforcement actions, Silvergate’s legal challenges persist.
In March 2024, a federal court judge allowed a class-action lawsuit to proceed, alleging that Silvergate facilitated the FTX fraud.
Additionally, in July 2024, the Securities and Exchange Commission filed a lawsuit against Silvergate Capital Corporation, accusing it of complicity in the same fraud.
These ongoing legal issues suggest that Silvergate has not yet fully emerged from its difficulties.