The Federal Reserve Board of the United States has issued a consent order to Silvergate Bank and its parent company as part of the institution’s plans to “wind down operations” and liquidate.

In a June 1 notice, the Fed said Silvergate Capital Corporation and the bank will have 10 days to submit a self-liquidation plan in compliance with California and federal requirements that will wind down its operations. The firm announced in March it planned to shutter operations “in light of recent industry and regulatory developments,” becoming one of three major crypto-friendly banks to close.

@federalreserve announces consent order against Silvergate Capital Corporation and Silvergate Bank to facilitate the voluntary self-liquidation that Silvergate announced on March 8, 2023: https://t.co/iWp4mfUeYI

— Federal Reserve (@federalreserve) June 1, 2023

Though Silvergate voluntarily announced its liquidation with plans for a “full repayment of all deposits,” the Fed notice said examinations “identified numerous deficiencies” at the bank following the collapse of crypto exchange FTX in November 2022. According to the Fed, Silvergate “experienced significant declines in deposits by its crypto-asset-related customers” in the fourth quarter of 2022, resulting in “funding and liquidity stress.”

Any Silvergate self-liquidation plan will prioritize protecting depositors’ funds. Fed officials and California’s Department of Financial Protection and Innovation will oversee and approve any plan proposed by Silvergate. In addition, the regulators have restricted Silvergate’s leadership ability to receive “golden parachute payments” and change responsibilities amid the winding down process.

Related: Crypto industry may escape lasting damage from Silvergate liquidation

Silvergate was the first major crypto-friendly bank to shutter operations, followed by Silicon Valley Bank and Signature Bank. Many digital asset firms — including Coinbase, Paxos, Gemini, Bitstamp and Galaxy Digital — previously had financial ties to Silvergate but announced they would be leaving following allegations the bank had been connected to the collapse of FTX.

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