Last Updated on March 4, 2023 by Bitfinsider
A bankruptcy court has ordered Silvergate Bank to release nearly $9.9 million to crypto lender BlockFi, days after the bank announced it was “reevaluating its business” and could be “undercapitalized,” causing a swarm of businesses to break links with the bank.
Friday’s court document indicates that U.S. Bankruptcy Judge Michael B. Kaplan ordered Silvergate to return $9,850,000 paid by BlockFi.
In November 2022, BlockFi applied for bankruptcy protection. Soon after filing, BlockFi started bargaining with Silvergate for the release of $10 million kept in a reserve account at the bank. On Friday, a deal was struck requiring the bank to release the bulk of these assets within two working days.
This week, Silvergate has had its own problems. In addition to capitalization issues, the bank based in La Jolla, California disclosed in a filing with the Securities and Exchange Commission on Wednesday that it faces “various litigation (including private litigation) and regulatory and other inquiries and investigations against or with respect to the Company, investigations from our banking regulators, congressional inquiries, and investigations from the U.S. Department of Justice.”
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