Brendan Blumer, founder and CEO of Block.one, developer of the EOS blockchain, has bought 571,351 shares of crypto bank Silvergate (SI), according to the US Securities and Exchange Commission (SEC). docs Submitted on Wednesday.
Bloomer Block.one also owns a stake in Silvergate, with 2,363,186 shares purchased on November 16. This was the same day that Blumer bought his shares. Both purchases – totaling 2,934,537 shares – represent approximately 9.27% of the company.
The deal made Blumer and his company the largest single shareholder in the crypto bank, according to CNN.
Blumer’s purchase comes at a difficult time for Silvergate. Shares of the crypto bank are currently trading at around $28, which is more than 50% lower than it was at the beginning of November, according to data from Yahoo! finance.
Selling pressure on Silvergate shares came in the wake of the explosion of cryptocurrency exchange FTX. Although the company has denied taking significant risks on the bankrupt exchange, it has about $1 billion in deposits with FTX. However, Silvergate said it accounts for less than 10% of all its customer deposits.
Silvergate wanted to launch its own stablecoin recently. It bought the failed Meta stablecoin project, Diem, which the two companies had been working on for some time. It did so in hopes of being integrated into the Silvergate exchange network. However, in October, the world’s largest bank specializing in cryptocurrencies said it was delaying the stablecoin project due to regulatory hurdles.
Silvergate’s newest and largest contributors are believed to have submitted the largest Initial Coin Offering (ICO) in cryptocurrency history. Block.one raised about $4 billion for the EOS project back in the 2017-2018 ICO frenzy. However, it was later charged by the SEC for not registering its ICO. The company settled with the SEC for $24 million.
Silvergate is the largest public bank specializing in cryptocurrencies. Having new investors will help it weather the current crypto storm.