Amid the major liquidity crisis, Silvergate Bank (NYSE: SI) decided to wind down operations and move into liquidation. This is one of the first and major high-profile blow up in the traditional banking space driven by the crypto turmoil.
EOS parent company Block.One, backed by legendary investor Peter Thiel, has finally booked a massive $83 million in its equity position in Silvergate Capital.
It stated that they decided to exit the position following Silvergate’s announcement of liquidation. The official announcement from Block.One reads:
“While we are disappointed with this outcome, we remain unwavering that banks and other financial institutions embracing the digital asset and cryptocurrency sectors are well-positioned to use technology to advance the capabilities of both the traditional financial services and the new burgeoning digital asset economy to better serve the needs of the public”.
As of December 31st, 2022, Block.one CEO Brendan Blumer and his company had a combined stake of 9.9% stake in Silvergate Bank. As per the SEC filings, it was approximately worth $95 million as of the stock price back then.
The CEO had first built a huge equity position of $92 million back in November. He added a few more later on December 31st. Unfortunately, this was exactly when troubles for Silvergate Bank started escalating.
On Thursday, March 9, the SI stock tanked a massive 42% closing at $2.84. The SI stock price has collapsed more than 83% year-to-date leading to a massive wealth erosion for Block.One
Silvergate Drags Crypto Market Down
The tremors of Silvergate’s collapse spread across the entire crypto industry. Bitcoin (BTC) is down 8.39% in the last 24 hours and is currently trading at $19,926 and a market cap of $384 billion.
Altcoins have faced an even more severe correction with Ethereum (ETH) and others tanking 7-10%. Apart from Silvergate Bank, the concerning macro trends and fall on Wall Street contributed to further selling pressure for Bitcoin and the crypto space. Also, the Biden administration is going hard after crypto investors as per the recent US budget.
The post EOS Parent Block.One Books $83 Million Loss on Silvergate Equity Position appeared first on CoinGape.
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