Media: Citadel Securities considers saving Silvergate Bank

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According to media reports, the global market giantMarket makers Citadel Securities plans to increase its stake in the capital of Silvergate Bank, which is on the verge of bankruptcy, and help it overcome its liquidity crisis.

Experts note that the root cause of the problemsSilvergate was the collapse of one of the financial institution's key clients, FTX Group. This caused not only a massive withdrawal of deposits, but also a stream of related problems for Silvergate related to internal investigations of the bank's activities by regulators and law enforcement agencies.

By the beginning of 2023, clients withdrew from theiraccounts in Silvergate deposits amounting to more than $8 billion. An acute shortage of working capital led to the need for an urgent sale of securities held by the bank, the dismissal of 40% of staff and the loss of almost $1 billion in three months. As a result, Silvergate's share price fell from $121 to $10.5.

Against this background, the largest internationalMarket maker Citadel Securities, owned by billionaire Ken Griffin and present in more than 50 countries, said it bought 1.6 million shares of Silvergate on December 31, 2022. Griffin has previously stated several times in interviews that he has changed his skeptical view of crypto assets.

“Cryptocurrency has become one of the greateststories in finance over the past 15 years. I've been in the skeptic camp all along, but the cryptocurrency market today has a market cap of trillions of dollars. This suggests that I was wrong in this forecast,” Griffin said in an interview with Bloomberg.

According to the Securities and Exchange CommissionUS exchanges (SEC), Citadel Securities owns 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, report Griffin’s desire to take advantage of the convenient moment and increase its share of Silvergate. Thus, Citadel Securities can save the crypto bank from possible bankruptcy.

However, a number of cryptocurrency exchanges andCompanies in the industry began to refuse to work with Silvergate after the bank announced a delay in the publication of its annual financial report and possible insolvency due to a decline in capitalization.