Silvergate’s ‘Worst-Case Scenario’ Fuels Wider Concern on Crypto
- Bank’s focus on digital assets stings in wake of FTX collapse
- Federal regulators weigh in on the industry as concern mounts
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Silvergate Capital Corp. made one of the US banking world’s biggest bets on crypto. Now it’s reeling from a run on deposits and a massive loss, intensifying fears the collapse of crypto exchange FTX may seep elsewhere into the financial system.
“The worst-case scenario seems to have come to pass” for Silvergate, Jared Shaw, an analyst at Wells Fargo & Co., said in a note after the company’s announcement. Silvergate shares cratered a record 49%.