Bankruptcy Judge Orders Silvergate Bank To Release $9.9M To Crypto Lender BlockFi

Zinger Key Points
  • Silvergate must return nearly $10M to BlockFi.
  • The beleaguered bank faces regulatory issues and loss of customers.

After filing for bankruptcy protection in November 2022, BlockFi has been granted the release of almost $9.9 million from Silvergate Capital Corp SI by a U.S. bankruptcy judge.

The bank had initially "reevaluated its business," which resulted in a number of companies ending their association with Silvergate.

A court filing Friday confirmed that Silvergate was required to return $9,850,000 deposited by BlockFi, The Block reported.

Despite facing its own problems this week, including various litigation and regulatory and other inquiries and investigations, Silvergate agreed to release the majority of the funds held in BlockFi's reserve account within two business days.

The judge's ruling means the bank will have to fulfill its commitment to the crypto lending firm.

The bank on Thursday admitted that it may struggle to remain solvent due to significant losses, sending its stock price spiraling down nearly 56% in intraday trade and trading down about 3% on Friday before recouping its losses to trade flat.

Major players in the crypto industry such as Coinbase Global Inc COIN, Galaxy Digital Holdings Ltd BRPHF, and Paxos Trust have moved quickly to sever ties with the beleaguered bank.

Next: EU Antitrust Chief Margrethe Vestager Concerned About Dominance In The Metaverse

Photo via Pixabay. 

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