Block.one, the Peter Thiel-backed crypto firm that notably raised $4 billion in an ICO for Ethereum rival EOS, announced Wednesday in a press release that it had sold its entire Silvergate Bank stock investment. After the company’s notification last week that its annual report to the Securities and Exchange Commission (SEC) will not be submitted on time, Block.one stated it had sold its equity stake in Silvergate. The company’s voluntary liquidation also plays a part in this decision.
While Block.one is dissatisfied with how Silvergate’s story ended, it remains steadfast on the opinion that banks and other financial institutions adopting the digital asset and cryptocurrency industries have made a good decision. Block.one also said that Bullish, its portfolio business, had no exposure to Silvergate.
Block.one was one of Silvergate’s largest investors, purchasing stock in November citing the bank’s “strong balance sheet” and “strategic positioning”. They also claimed the growth of the bank was resilient in the harsh market conditions which made it a “unique investment opportunity,” per a company statement issued at the time, which has since been removed.
A division of Bullish, Block.one is a blockchain software firm. It was first backed by Peter Theil, a businessman and investor. He cofounded PayPal, served as CEO, and took it public; he was the first outside investor in Facebook, where he currently serves as a director; and he cofounded Palantir Technologies, where he currently serves as chairman. Thiel was also one of the first well-known investors to put money into Bitcoin when it was trading for less than $1,000 in 2014, and he grew his holdings over the next eight years.
CEO Brendan Blumer and his business owned a combined 9.9% ownership in Silvergate Bank worth $95 million in 2022, according to SEC filings. He first acquired a 9.27% stake in November for about $92 million, and the rest on December 31. Silvergate’s shares finished trading at $5.69 on Friday when Block.one said it was exiting its stock investment.
The bank stated last Friday that it will shut down its Silvergate Exchange Network (SEN), a tool used by institutional clients to settle big transactions with one another. In recent weeks, it has been more clear that Silvergate Bank is in crisis. Before the bank’s collapse statement last Wednesday, an increasing number of institutional clients declared that they had cut connections with the crypto-friendly bank.
