Silvergate Bank and its parent company have been ordered by the Federal Reserve Board to follow plans for winding down operations and liquidating.
According to a notice released on June 1 by the Federal Reserve Board, Silvergate Capital Corporation and its associated bank were given 10 days to submit a plan of self-liquidation that complies with state and federal regulations.
The company had previously announced its decision to shut down due to changes in the industry and regulatory environment, putting it in the same category as other banks that were friendly towards cryptocurrencies.
The order highlights the need for protecting depositors and the Deposit Insurance Fund, which requires the company to maintain accurate records, retain staff, and properly manage its financial instruments during the self-liquidation process.
Furthermore, the order prohibits Silvergate from engaging in particular transactions or business expansion without regulatory consent, including avoiding “golden parachute” agreements that might result in excessive compensation for newly appointed executives.
While the ordered shutdown and liquidation of Silvergate Bank might have an impact on depositors and the cryptocurrency industry, it underscores the importance of regulatory oversight and efforts to safeguard stakeholders during times of transition.
Compiled by Coinbold
