BlockTower Capital Funds Had Exposure to Silvergate, Signature Bank

Silvergate Bank announced a voluntary liquidation last week. Signature Bank was taken over by regulators on Sunday.

AccessTimeIconMar 13, 2023 at 7:24 p.m. UTC
Updated May 9, 2023 at 4:10 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Four private funds of crypto asset manager BlockTower Capital used now-shuttered Signature Bank, Silvergate Bank – and in one case, both – as custodians for the assets, according to the most recent regulatory filing required for investment advisers. The funds added up to about $940 million in gross asset value.

On March 8, crypto-friendly Silvergate Bank announced it would voluntarily liquidate its assets and wind down operations after announcing a delay filing its annual report due to questions from its independent auditors and accounting firm over the financial figures. Two days later, venture capital and tech-favored Silicon Valley Bank was shuttered by California regulators because of insolvency concerns. Finishing the trifecta of bank collapses, New York-based Signature Bank – a former crypto-friendly institution that began limiting industry exposure last year – was shut down by state regulators on March 12 in order “to protect depositors.”

According to the Form ADV Filing dated May 11, 2022, the BlockTower Blue Signum SPV fund, which had about $4.6 million in gross asset value at the time of the filing, used Silvergate Bank as its sole custodian. The BlockTower DeFi SPV I fund ($74.6 million in gross assets) also listed only Silvergate, while the BlockTower Gamma Point Master Fund ($89 million) had Signature Bank as the custodian.

BlockTower Capital Partners Master Fund ($770.5 million in gross assets) was the most diversified, listing five custodians: Silvergate, Signature Bank, the trust services of Anchorage Digital and Coinbase, and Celadon Financial Group.

The date on the filing means that BlockTower Capital could have moved to different custodians in the interim. CoinDesk reached out to BlockTower for comment but had not received a response by publication time.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Brandy Betz

Brandy covered crypto-related venture capital deals for CoinDesk.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.