Silvergate Bank
Although the Bankruptcy Code prohibits banks from filing for bankruptcy, Silvergate will proceed with its liquidation process under applicable state and non-bankruptcy federal law. Silvergate was initially founded in 1988 but emerged on the crypto scene beginning in 2013 when it begin a targeted effort of servicing crypto clients. In addition to taking deposits, Silvergate created a real-time payments system called the Silvergate Exchange Network which enabled customers to exchange crypto and fiat currencies. In 2022, Silvergate reported to have approximately $12 billion in deposits from crypto customers (comprising 90% of all deposits held by Silvergate), including major crypto investors and exchanges. FTX and affiliated companies controlled by Sam Bankman-Fried accounted for nearly $1 billion of these deposits. The recent cascade of bankruptcy filings in the crypto space, and the concurrent collapse in the value of crypto, resulted in a run on the bank, including over $8 billion in withdrawals by the end of 2022. Silvergate was ultimately unable to effectuate a turn-around and will soon dissolve.