Digital Currency Group Welcomes Bitcoin-Friendly Bank to the ‘DCG Family’
This week the ‘bitcoin-friendly’ financial institution Silvergate Bank sold 9.5 million shares that raised a sum of $114Mn USD during the common stock sale. Some of the capital injection was provided by the venture capital firm Digital Currency Group who welcomed Silvergate Bank into the company’s growing list of partners and subsidiaries.
‘Bitcoin-Friendly’ Bank Raises $114 Million in Private Placement
Silvergate Bank is a financial institution that has bolstered bitcoin-based companies for quite some time. Silvergate was known for providing banking services to crypto-startups when other banks refused to work with those types of companies. According to the company, the bank has a relationship with fifteen cryptocurrency-focused businesses, and in April of last year, Silvergate collaborated with the blockchain surveillance company Elliptic. Moreover, back in 2014 the president and CEO of Silvergate Bank, Alan Lane discussed bitcoin at California Bankers Association meetings.
On February 26 Silvergate revealed it had raised $114Mn and the funds will promote further growth in a nationwide financial tech deposit initiative. “Our recent private placement is a major milestone in the history of Silvergate, increasing our equity capital by over 120%,” said Dennis Frank, Silvergate’s chairman during the announcement. However, the investors who helped raise the capital were not disclosed throughout the bank’s press statements.
“Our greatly increased capital base will support our growth and enable us to continue making investments in technology and people that will improve efficiency and productivity, and expand the products and services offered to our business customers,” Silvergate’s CEO Lane said yesterday.
A Few Hours Later Digital Currency Group Welcomes Silvergate Bank Into the DCG Family
Then a few hours later the venture capital firm Digital Currency Group (DCG) revealed it had invested in Silvergate’s private placement.
“We are thrilled to welcome Silvergate Bank to the DCG family of companies,” explains DCG to its Twitter followers.
The New York-based firm DCG created in 2015 has its hands in a lot of cryptocurrency and blockchain based startups within the industry. The company was founded by Barry Silbert, and its 114 investments cover companies like Ledger Wallet, Bitgo, Bitpay, Blockstack, and more. The relationship with Silvergate Bank may help its investment companies with a more robust banking relationship. Many crypto-businesses and bitcoin-based debit card providers have been having difficulties with financial institutions over the past few months. The announcement from DCG concerning investing in Silvergate also follows the venture firm welcoming Poloniex to the DCG family as it has a stake in the company Circle Pay.
“Huge news from DCG portfolio company Circle Pay — We are thrilled to welcome Poloniex to the DCG family,” the company declares.
What do you think DCG investing in Silvergate Bank? Let us know your thoughts on this story in the comments below.
Images via Shutterstock, Silvergate Bank, and DCG.
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