Ken Griffin’s Citadel Securities reveals 5.5% stake in crypto bank Silvergate

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Feb 14 (Reuters) — Citadel Secu­ri­ties, the mar­ket mak­er owned by Citadel’s Ken Grif­fin, on Tues­day report­ed a 5.5% stake in cryp­tocur­ren­cy-focused lender Sil­ver­gate Cap­i­tal Corp (SI.N) worth about $25 mil­lion, accord­ing to a reg­u­la­to­ry filing.

Shares in Sil­ver­gate jumped after the dis­clo­sure, and were last up about 14%.

A rep­re­sen­ta­tive for Sil­ver­gate did not imme­di­ate­ly respond to a request for comment.

The fil­ing was a result of the fir­m’s mar­ket mak­ing oper­a­tions as opposed to a direc­tion­al invest­ment in Sil­ver­gate, accord­ing to a per­son famil­iar with the matter.

On Mon­day, Soros Fund Man­age­ment dis­closed a bet against Sil­ver­gate in a reg­u­la­to­ry fil­ing, which showed a put options posi­tion against 100,000 shares of Sil­ver­gate as of Dec 31. Based on Sil­ver­gate’s clos­ing price of $17.40 at the end of 2022, the val­ue of those shares would be about $1.74 million.

Put options give investors the right to sell shares at a cer­tain price in the future.

Details on the strike price of the puts, their val­ue and whether they are part of a broad­er trade were not avail­able. A rep­re­sen­ta­tive for Soros Fund Man­age­ment did not imme­di­ate­ly respond to a request for comment.

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Sil­ver­gate has been seek­ing to ease investor con­cerns over its future, after report­ing a $1 bil­lion loss for the fourth quar­ter because cryp­to exchange FTX’s bank­rupt­cy shook con­fi­dence in the dig­i­tal asset sector.

Fed­er­al pros­e­cu­tors in Wash­ing­ton are prob­ing Sil­ver­gate and its deal­ings with FTX and Alame­da Research, a source famil­iar with the inves­ti­ga­tion has said.

U.S. cus­to­di­an bank State Street Corp (STT.N) report­ed a 9.32% pas­sive stake in Sil­ver­gate ear­li­er this month.

Report­ing by Han­nah Lang in Wash­ing­ton; addi­tion­al report­ing by Saqib Ahmed; Edit­ing by Leslie Adler and Jane Merriman

Our Stan­dards: The Thom­son Reuters Trust Principles.

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