Block.one CEO Acquires Significant Equity Stake of Crypto Bank Silvergate
Brendan Blumer, the CEO of Block.one, the company behind EOSIO and the EOS coin, has acquired a stake in Silvergate Capital. This news came from an SEC filing which dated Nov 23 and listed November 16 as the date for the transaction.
Silvergate Capital is the holding company for Silvergate Bank, a crypto-fiat gateway network serving financial institutions.
Brenden Blumer and Dan Larimer founded Block.one in 2017 as a private blockchain company.
A key component of the company’s product is the open-source software EOS.IO protocol, announced in 2017 and released to the public in 2018.
Block.one CEO Biggest Shareholder Of Silvergate
Brendan Blumer bought 9.3% and Block.One bought an additional 7.5%, in which Blumer purchased 2,934,537 shares of Silvergate Capital on Nov. 16, while Block.One bought 2,363,186 shares.
As a result of the purchase, Blumer has become Silvergate’s largest shareholder, according to FactSet statistics.
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A press release from Block.one noted that the company believes Silvergate Capital continues to lead the way in innovation within federally regulated banking frameworks at a lower cost than its competitors.
“Further, 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,” cited the press release.
Silvergate Exposure From FTX Collapse
The shares of Silvergate were up about 5% on Wednesday afternoon, but have fallen drastically since crypto exchange FTX collapsed amid concerns that Silvergate’s connection to FTX would also harm it.
While FTX holds more than $1 billion in deposits with Silvergate, the bank says those deposits make up less than 10% of its total digital asset deposits.
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Furthermore, the CEO has reassured investors that the crypto banker’s business would not be affected by the market volatility created by FTX’s collapse.
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