Brendan Blumer, the founder and CEO of EOS developer Block.One, has bought 9.3% of crypto bank Silvergate Capital (SI), while Block.One bought an additional 7.5%, according to Securities and Exchange Commission documents filed on Wednesday. According to the filings, Blumer bought 2,934,537 shares of the crypto bank on Nov. 16 while Block.One bought 2,363,186 shares.
The purchase makes Blumer the largest shareholder of Silvergate, according to the latest statistics from FactSet.
Block.one is a private blockchain company founded by Brenden Blumer and Dan Larimer in 2017. It is best known for developing the EOS.IO protocol, which the company announced in 2017 and subsequently released as open-source software in 2018.
In a press release, Block.one said it believed Silvergate was a consistent innovator whose share price was undervalued.
“We believe Silvergate’s current equity prices do not accurately reflect their strong balance sheet, their strategic positioning, or their market-defiant growth trajectory, and therefore offers a unique investment opportunity. We are excited to be a new passive shareholder,” the company wrote.
Shares of Silvergate were rising about 5% on Wednesday afternoon. They are down sharply since the collapse of crypto exchange FTX on concerns that Silvergate’s exposure to FTX would weigh heavily on it as well. FTX does have at least $1 billion in deposits with Silvergate, but the bank says that represents less than 10% of its total deposits from all digital asset customers.
Its CEO has also sought to reassure investors that market volatility created by FTX’s collapse would not affect the crypto banker’s business.
“Suffice it to say, whether deposits are up or down, we have the liquidity and the capital ratios to support the volatility,” said Alan Lane at the Oppenheimer Blockchain & Digital Assets Summit last Thursday.
UPDATE (Nov. 23: 20:07 UTC): Added statement from Block.one’s press release.