Key points:

1. Silvergate’s stock became a prime target for short-sellers in February 2023, with 72% of shares borrowed for short positions.
2. The bank’s delayed release of its 10-K form in early March 2023 triggered a 31% stock price plummet.
3. Silvergate officially collapsed on March 8, 2023, citing financial shortfalls related to the FTX collapse and mass client withdrawals.
4. The Federal Reserve Board provided oversight during Silvergate’s self-liquidation process to ensure maximum customer reimbursement.
5. Despite government oversight, several lawsuits have been filed against the defunct bank.
6. CEO Alan Lane and other top executives departed in August 2023 amid ongoing liquidation and legal challenges.

While the Federal Reserve’s action concludes, Silvergate still faces significant legal hurdles:

• In March 2024, a federal judge allowed a class-action lawsuit to proceed, alleging Silvergate’s role in enabling FTX fraud.
• The Securities and Exchange Commission (SEC) filed a lawsuit against Silvergate in July 2024, further complicating the bank’s legal landscape.

This case continues to underscore the complex regulatory and legal challenges facing cryptocurrency-focused financial institutions, as well as the ongoing repercussions of the FTX collapse on the broader crypto ecosystem.