Silvergate Capital Corp. SI, -5.76% shares plunged more than 30% in after-hours trading Wednesday after the company said it intended to wind down operations and voluntarily liquidate its subsidiary Silvergate Bank, a crypto-friendly lender.
The stock’s plunge would take it to a record low if losses hold through regular trading Thursday.
The La Jolla, Calif.-based lender made the announcement after it said last week in a regulatory filing that it was at risk of “being less than well-capitalized,” and discontinued its crypto-payments network.
As one of the few crypto-friendly banks, the liquidation of Silvergate Bank points to uncertainty in the future relationships between crypto companies and banks, who play an essential role in the conversion of fiat currencies into crypto.
Read: Crypto traders may lean toward stablecoins after Silvergate ceases crypto payments network
Silvergate Bank’s liquidation plan includes full repayment of all deposits, according to a statement Wednesday.
The company is considering the best way to resolve claims and preserve the residual value of its assets, Silvergate Capital said. All of the company’s other deposit-related services remain operational, it said.
Silvergate also said it hired Centerview Partners as financial adviser and Cravath, Swaine & Moore LLP as legal adviser.
Several crypto companies, such as Coinbase Global Inc. COIN, +1.81%, Galaxy Digital, Paxos and Circle, said last week that they would cease some or all payment transactions with Silvergate Bank.
Representatives at Silvergate didn’t immediately respond to a request seeking comment.
Signature Bank SBNY, -1.47%, another crypto-friendly lender, saw its shares slide 3.7% in after-hours trading Wednesday.
Major cryptocurrencies were steady Wednesday. Bitcoin BTCUSD, -1.22% lost 0.3% to around $21,981, while ether ETHUSD, -0.95% gained 0.2% to about $1,550, according to CoindDesk data.
Read: Here’s the real challenge facing Silvergate and other ‘crypto banks,’ says this short seller
This article was originally published by Marketwatch.com. Read the original article here.