Why Silvergate Bank is Winding Down… and Why It's a Big Blow to Crypto

When mainstream banks were closing traders' accounts, Silvergate embraced cryptocurrency exchanges. Now it's gone and no mainstream banks want to take its place.
Just having to ask the question in a Securities and Exchange Commission filing is generally enough to provide the answer.

So it proved for Silvergate, the longest-standing and most important bank serving the crypto industry.

The institution has announced that its closing its doors — badly bruised after that fateful filing led to an exodus of major corporate clients… Coinbase, Gemini, Paxos and Circle among them.

"An orderly wind down of bank operations and a voluntary liquidation of the bank is the best path forward," the California-based corporation said in a statement. This would include repayment of all deposits, it added.

SIlvergate blamed "recent industry and regulatory developments" for its woes.

Those regulatory developments covered a host of issues, from a Justice Department investigation to growing moves by the Federal Reserve and other federal agencies with oversight of the banking industry pushing those institutions far away from crypto.