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Block.One and Its Founder Buy Almost 9.27% of Crypto Bank Silvergate (SI)

Cryptocurrency Nov 24, 2022 12:00PM ET
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Block.One and Its Founder Buy Almost 9.27% of Crypto Bank Silvergate (SI)
 
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  • Founder and CEO of EOS developer Block.one acquired 571,351 shares of the crypto bank Silvergate (SI).
  • Block.one acquired 2,363,186 shares. Both purchases make up about 9.27% of the company, making Blumer and Block.one the largest shareholders of Silvergate.

Brendan Blumer, the founder and CEO of Block.one, the developer of the EOS blockchain, has purchased 571,351 shares of the crypto bank Silvergate (SI), according to U.S. Securities and Exchange Commission (SEC) documents filed on Wednesday.

Blumer’s company Block.one also has a stake in Silvergate, with 2,363,186 shares bought on November 16. This was the same day that Blumer bought his shares. Both purchases – totaling 2,934,537 shares – represent about 9.27% of the company.

The deal has made Blumer and his company the single largest shareholders in the crypto bank, according to CNN.

Blumer’s purchase comes at a difficult time for Silvergate. The crypto bank’s shares are currently trading at around $28, which is more than 50% lower than at the start of November, according to data from Yahoo! Finance.

The selling pressure on Silvergate’s shares has come in the wake of the blowup of the crypto exchange FTX. Though the company has denied having large exposure to the bankrupt exchange, it has about $1 billion in deposits with FTX. However, Silvergate has said that it represents less than 10% of all of its customers’ deposits.

Silvergate has wanted to launch a stablecoin of its own lately. It purchased Meta’s failed stablecoin project, Diem, on which the two companies worked for some time. It did so with the hope of integrating it into its Silvergate Exchange Network. However, in October the world’s largest bank specializing in crypto said that it’s postponing the stablecoin project because of regulatory obstacles.

Silvergate’s newest and largest shareholders are thought to have performed the largest initial coin offering (ICO) in the history of crypto. Block.one raised around $4 billion for its EOS project back in the 2017-2018 ICO craze. However, it was later charged by the SEC for not registering its ICO. The company settled with the SEC for $24 million.

On the Flipside

  • It’s unclear what plans Blumer and his company have for Silvergate.

Why You Should Care

Silvergate is the largest public bank specializing in crypto. Having new investors is going to help it weather the current crypto storm.

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Block.One and Its Founder Buy Almost 9.27% of Crypto Bank Silvergate (SI)
 

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