The Federal Reserve Board has ordered Silvergate Bank and its parent company to comply with plans for winding down operations and liquidation.
As per the June 1 notice, Silvergate Capital Corporation and its associated bank have been given a 10-day deadline to submit a self-liquidation plan per state and federal regulations.
The firm had previously announced its decision to cease operations due to industry and regulatory changes, joining the ranks of major crypto-friendly banks undergoing closure.
The recent order emphasizes that Silvergate’s shutdown process must prioritize the protection of depositors and the Deposit Insurance Fund, necessitating the company’s responsibility to retain staff, manage financial instruments, and uphold accurate records for the benefit of depositors.
The order explicitly prohibits Silvergate from engaging in specific transactions or business expansion without regulatory consent, particularly disallowing “golden parachute” agreements that could lead to excessive compensation for newly assigned executives.
The ordered shutdown and liquidation of Silvergate Bank raises concerns about the impact on depositors and the crypto industry, highlighting the need for regulatory oversight and measures to protect stakeholders during such transitions.
Also Read: Tether Looks Away from Silvergate Bank
