Shares of Silvergate Capital fell 10% in early trading on Monday after the bank suspended its crypto payments network and expressed doubts over the viability of its business.
The crypto-focused bank said late on Friday that it had made a “risk-based decision” to discontinue the Silvergate Exchange Network (SEN) effective immediately.
“The SEN is Silvergate’s main flagship product that previously was the key attraction for depositors to bring funds to the bank,” said analysts at Wedbush.
“We believe a receivership/liquidation scenario is a distinct possibility and arrive at a liquidation value of $5 per share,” Wedbush analysts said. The estimated price marks a roughly 13% downside to the stock’s previous close.
A slew of crypto heavyweights including Coinbase Global have dropped Silvergate as their banking partner.
The firm has been struggling to stay afloat after the collapse of Sam Bankman-Fried’s crypto exchange FTX in November drove investors to pull out $8 billion in deposits from the bank in the last three months of the year.
from Science and Technology News - Latest science and technology news https://ift.tt/pqJHRsB
via IFTTT