2023-03-04 20:00:25
Media: Citadel Securities is considering a bailout of Silvergate Bank
By early 2023, customers had withdrawn more than $8 billion in deposits at Silvergate. The acute shortage of working capital led to an emergency sale of the bank's securities holdings, laying off 40% of its staff and losing nearly $1 billion in three months. As a result, Silvergate's share price fell from $121 to $10.5.
Against this backdrop, Citadel Securities, the largest international market maker owned by billionaire Ken Griffin and with a presence in more than 50 countries, said it bought 1.6 million Silvergate shares on December 31, 2022. Griffin has previously stated in numerous interviews that he has changed his skepticism about crypto-assets.
"Cryptocurrency has become one of the greatest stories in finance in the last 15 years. I've been in the skeptic camp throughout that time, but the cryptocurrency market today has a market capitalization of trillions of dollars. It shows that I was wrong in that prediction," Griffin said in an interview for Bloomberg.
According to the U.S. Securities and Exchange Commission (SEC), Citadel Securities has a 5.5% stake in Silvergate worth about $25 million. Although the information is not yet official, the media, citing unnamed sources close to Citadel, reported on Griffin's desire to take advantage of an opportunity to increase its share of Silvergate. By doing so, Citadel Securities could save the cryptocurrency bank from likely bankruptcy.
However, a number of cryptocurrency exchanges and companies in the industry have begun refusing to work with Silvergate after the bank announced a delay in publishing its annual financial report and possible insolvency due to its declining capitalization.
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