Troubled crypto bank Silvergate sees regulators swoop in to try to help it stay afloat
Troubled crypto-friendly bank Silvergate Capital is talking with US regulators to find a way to avoid going out of business, as fears grow for the key player in the digital-asset industry,Officials from the Federal Deposit Insurance Corp. visited Silvergate's headquarters in California last week to meet its management team, Bloomberg reported Tuesday, citing people familiar with the matter.
One way to help Silvergate stay afloat discussed in the FDIC meeting was to gather crypto investors to help the bank boost its liquidity, per Bloomberg. The institution saw its deposits fall by over 50% in the three months to December 31, to $6.3 billion. Since the crypto bank's client deposits are insured by the US government, the FDIC could be key to finding a viable solution to its predicament. The agency insures deposits of clients in banks and handles receivership — a process where it steps in to manage a troubled company — for those institutions.with the Securities and Exchange Commission because it said it needed more time to look into how badly its finances have been hit by the events battering the crypto world.
The payment service provided quick transfers between investors and crypto exchanges possible at any time, unlike traditional bank wires that typically take a few days to go through. That made it a key part of the crypto industry.
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