Barry Silbert of the Digital Currency Group (DCG), part owner of Coindesk and of ETC fame, has bought out an actual state chartered traditional bank according to an announcement.
The San Diego-based commercial bank, Silvergate Bank, which provides all the usual services of deposits, lending and so on, said they sold 9.5 million shares in a private placement generating gross proceeds of $114 million.
Far less than the rumored $400 million Circle paid for Poloniex, but then Silvergate does appear to be far more local than the crypto exchange, so limited to California.
The bank doesn’t quite say who bought those shares, but DCG voluntarily offered a hint to their 29,000 twitter followers by stating “welcome Silvergate Bank to the DCG family of companies.”
That doesn’t mean they bought all of the sold shares, with Alan Lane, Silvergate’s president and CEO, stating the sale “generated broad based support from both traditional bank investors and other strategic investors.”
But whether support means actual purchase or just showing interest remains unclear. What is somewhat clear however is that the former Wall Street investment banker, Silbert, made a strategic investment in the bank.
Silvergate has been somewhat forward looking when it comes to crypto companies, offering them bank accounts when others were more reluctant to do so.
Able to cover the entire state of California, which includes Silicon Valley where many blockchain companies are based, the service it provides can be necessary.
But it can be limited as it would need to comply with further regulations and acquire further licenses to operate nationally across the United States.
The purchase however is probably one step to address a somewhat unfriendly attitude from banks towards blockchain companies, with cryptonians now seemingly entering the banking system directly.
That could ease some of the pressure and might be a way to address what some perceive as anti-competitive practices, but Silbert’s known biases against many cryptos might raise questions as to just how far this acquisition may go in addressing those concerns.
