Citadel Securities discloses hefty stake in struggling Silvergate

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Billionaire Ken Griffin’s behemoth Citadel Securities has declared a 5.5% stake in Silvergate Capital worth around $25 million, according to a new filing with the Securities and Exchange Commission (SEC).

In a Form 13G, Citadel disclosed it bought up 1.6 million shares in the struggling crypto-friendly bank on December 31. Silvergate has suffered heavy losses since its largest customers, FTX and Alameda Research, went bankrupt and caused a bank-run that severely depleted Silvergate’s funds.

Griffin made quite an entrance into crypto last year by famously buying a rare copy of the US Constitution by outbidding CoinstitutionDAO. Before that, Griffin vehemently denounced crypto. In March, before the industry entered a bear market, he told Bloomberg:

“Crypto has been one of the great stories in finance over the course of the last 15 years. And I’ll be clear, I’ve been in the naysayer camp over that period of time.

“But the crypto market today has a market capitalization of about $2 trillion in round numbers, which tells you that I haven’t been right on this call.”

Of course, since then, crypto’s market cap has just about halved to one trillion dollars.

Citadel buys stake in struggling Silvergate

Financial service provider and bank Silvergate posted a loss of $949 million for the last quarter of 2022. It laid off 40% of its staff and announced it expected to lose $8.1 million in restructuring costs and severence packages.

During the same quarter, customers withdrew a whopping (and record-breaking) $8 billion from the bank. Its largest customers were now-bankrupt FTX and Alameda Research.

Silvergate in crisis: Billions withdrawn, liquidations and losses mount

Despite its heavy losses, Silvergate remains optimistic. In January, its chief exec Alane Lane said, ““While we are taking decisive actions to navigate the current environment, our mission has not changed. We believe in the digital asset industry.”

Silvergate’s stock price is down 87% year-to-date, from $121 to $15 at press time.

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