Cryptocurrency venture capital firm Digital Currency Group (DCG) has decided to invest in Silvergate Capital Corporation, the holding company of Silvergate Bank, which supports bitcoin startups.
DCG sold 9.5 million shares in a private placement valued at $114 million, Silvergate said. Proceeds from the sale will be used to further support the bank's fintech initiatives.
Barry Silbert, founder of DCG, confirmed the firm's participation in the sale in an email to CoinDesk, but the investment amount and names of investors have not yet been disclosed. The company also tweeted: "We are thrilled to welcome Silvergate Bank to the DCG family of companies." DCG has not said exactly how much it plans to invest, but the fact that it is investing is significant given Silvergate's position as a supporter of cryptocurrency companies. Back in 2014, the cryptocurrency industry was having difficulty obtaining banking services from traditional financial institutions, with many banks refusing to open accounts for cryptocurrency companies or suddenly closing accounts without explanation. However, Silvergate Bank offered banking services to cryptocurrency companies at a time when other banks avoided such clients due to the risks.
According to https://www.coindesk.com
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