State Street Takes 9.32% Stake in Silvergate Bank
Asset manager State Street has disclosed a 9.32% stake in crypto bank Silvergate, a Thursday SEC filing shows. The Boston-based firm notes that the stake is passive—meaning that it doesn’t intend to change or influence the company.
Silvergate has been in a pickle lately: lawmakers have just alleged that the bank “further introduced crypto market risk into the traditional banking system,” and demanded Silvergate provide more information. Last month, the banking group said it would cut 40% of its workforce and abandon some projects.
Silvergate also reported a $1 billion net loss to shareholders, citing a “transformational shift” in the crypto industry which led to a “crisis of confidence across the ecosystem”—referring to the collapse of crypto exchange FTX.
And in Q4 2022, Silvergate announced that users pulled $8.1 billion in crypto deposits.
Despite these headwinds, State Street isn’t the only big traditional finance player with an investment in Silvergate: BlackRock this week reported in a filing that it had increased its stake in the bank from 5.9% to 7.2%.
FTX spectacularly blew up in November allegedly because of gross mismanagement. Its ex-boss and co-founder Sam Bankman-Fried is now facing eight criminal charges.
Bankman-Fried—known as SBF—pleaded not guilty to the charges in January and is now awaiting a trial scheduled for October.
Silvergate had close ties with FTX and has therefore been hit hard by its downfall. Many other crypto companies have been hit hard by the collapse of FTX, which rocked the crypto world and ruined customer confidence in the ecosystem.