EOS developer Block.one and its CEO Brendan Blumer have acquired separate stakes in Silvergate for a combined 17% ownership.
By Tolu Ajiboye
Updated
3 mins read
Brendan Blumer, founder, and CEO of EOS developer Block.one, recently purchased a 9.3% stake in crypto bank Silvergate Capital (NYSE: SI). This acquisition makes Blumer the largest shareholder of the California-based digital asset institution. Furthermore, filings with the Securities and Exchange Commission (SEC) reveal that Block.one bought an additional 7.5% of Silvergate’s shares. This development means that Block.one and its CEO Blumer own a combined 17% stake in Silvergate.
According to documents, Blumer’s 9.3% Silvergate stake amounts to 2,934,537 shares, while his Block.one firm owns 2,363,186 shares of the crypto bank.
Block.one suggested in a press release that its sizable purchase of Silvergate’s stock demonstrates faith in the crypto bank’s operability. According to the EOS developer, Silvergate is a consistent innovator with an undervalued share price. As Block.one wrote:
“Silvergate Capital has a proven track record of maintaining a liquid and conservative balance sheet investment portfolio – far more conservative than most federally regulated banking institutions… We believe Silvergate’s current equity prices do not accurately reflect their strong balance sheet, their strategic positioning, or their market-defiant growth trajectory, and therefore offers a unique investment opportunity. We are excited to be a new passive shareholder.”
Silvergate shares were trading more than 8% higher at $27.47 Wednesday afternoon following the Block.one development. As of press time, the company’s stock is priced at $28.15.
Although Silvergate has pared down losses incurred over the past week, the crypto bank is still 49% down over the past month. This deficit comes in the aftermath of the sudden collapse of one-time leading crypto exchange FTX. Traders and observers believe Silvergate’s market cap is declining due to the company’s substantial exposure to the fallen FTX. Last Thursday, Silvergate’s chief executive Alan Lane moved to assuage investors and play down the implication of the FTX crash on the crypto bank. At the time, Lane explained:
“Suffice it to say, whether deposits are up or down, we have the liquidity and the capital ratios to support the volatility.”
However, his remarks seemed to have little effect, likely due to the grim fact that FTX has a deposit in Silvergate of at least a billion dollars. However, the California-based crypto bank insists that the stated amount represents under 10% of all deposits from digital asset customers. Furthermore, Lane noted that Silvergate had no outstanding loans or investments at FTX. In addition, the bank’s CEO said that the embattled crypto exchange does not have custody of Silvergate’s bitcoin-collateralized SEN Leverage loans.
FTX declared bankruptcy earlier in the month, sending shockwaves throughout the digital asset landscape. The company’s official declaration of insolvency also threw several crypto-minded firms into a tailspin as fears of a contagion intensified.
In the wake of its collapse, FTX is also under numerous governmental investigations in the US and Bahamas. In addition, several celebrities and prominent personalities affiliated with the ill-fated crypto firm are also under ongoing probes. These include American football legend Tom Brady and Golden State Warriors marksman Stephen Curry.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
