Cryptocurrency venture capital firm Digital Currency Group (DCG) has confirmed an investment in Silvergate Capital Corporation, the holding company of the bitcoin startup-friendly Silvergate Bank.
According to an announcement from Silvergate, the firm said Monday that it sold 9.5 million shares through a private placement generating $114 million in total – funds that will be used to further support the bank's fintech deposit initiatives.
Although the announcement did not disclosed any investors, Barry Silbert, founder of DCG, confirmed the firm's participation in the sale via an email to CoinDesk, following an official tweet.
While the amount of investment remains unknown, the move by DCG is notable given Silvergate's known stance in supporting cryptocurrency startups.
As early as in 2014, the cryptocurrency industry has encountered challenges in receiving banking services from traditional financial institutions, with many banks refusing to open accounts for crypto firms, or abruptly closing accounts without explanation.
Silvergate Bank, however, offered bank accounts to bitcoin startups, even while others shied away from bitcoin-related clients due to risk concerns.
According to a previous CoinDesk article, Silvergate Bank was supporting 15 cryptocurrency startups as of May 2016.
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Silvergate Bank.
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The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.