In a recent turn of events, multiple executives of the embattled California-based cryptocurrency bank Silvergate Capital have announced that they will be stepping away from their roles at the bank.
The announcement comes as the bank remains deep in the throes of liquidation while battling multiple lawsuits linked to its demise.
Top Executives Set to Step Down
Silvergate Capital Corp announced on Tuesday, August 16, the departure of some of its primary employees working in executive leadership positions in its company. The executives leaving include Chief Financial Officer, Antonia Martino, Chief Legal Officer, John Bonino, and CEO, Alan Lane.
Lane and the company’s Chief Legal Officer will be departing on Tuesday, August 16, and according to a financial filing delivered to the United States Securities and Exchange Commission (SEC), Silvergate’s Chief Legal Officer is set to step down on September 30.
The executives’ decision to depart from Silvergate follows the bank’s announcement in March to shut down operations and liquidate its assets. Lane has served as the CEO of Silver Capital Corp and Silvergate Bank since 2008 and played a pivotal role in Silvergate’s development and growth.
In the absence of a CEO, Silvergate has replaced Lane with Silvergate’s Chief Transition Officer, Kathleen M. Fraher. It has also made Andrew Surry, Silvergate’s Accounting Officer, the principal financial offer in the absence of Martino.
Silvergate stated in the filing to the SEC that it will provide each executive severance benefits previously offered to employees laid off through the bank’s liquidation process.
Earlier this year in January, Silvergate laid off over 180 employees, cutting its workforce by 40%. Again, in May, the bank laid off over 250 workers, leaving a group of about 80 to oversee its liquidation and termination process.
The San-Diego-based bank said in a report that it plans to significantly reduce the number of employees in its company and manage its operations using a skeleton crew.
Stock price falls from $20 to $0.2 | Source: Silvergate Capital Corporation on Tradingview.com
Silvergate Enveloped in Lawsuits and Liquidations
In November 2022, Silvergate collapsed following the FTX failure and embroilment in fraud. Silvergate, which served as one of the two major banks for cryptocurrency companies in the industry, decided to officially shut down all operations and start a liquidation process.
As a result, stocks plunged by 36% and the bank suffered massive customer withdrawals. Toward the end of Q3, Silvergate’s total deposits from crypto customers plummeted by 68%, declining to $3.8 billion from an astonishing $11.9 billion.
According to reports, FTX was one of Silvergate’s major customers and it was revealed that Silvergate held about $1 billion in deposits from FTX at the time of its failure. Silvergate’s affiliation with FTX has caused severe financial damage to the bank’s reputation and put it on the radar of the regulatory authorities in the United States.
Silvergate was also mentioned in multiple lawsuits due to its association with the bankrupt FTX and allegations of participation in FTX’s fraudulent activities.
Featured image from iStock, chart from Tradingview.com
