Silvergate crisis, what is happening and what does "less than well-capitalized" mean

Looks like Silvergate is having a hard time. Frankly, I think the crypto market is over-reacting a bit on this one. This bank has been in steady decline for the past few months as a result of FTX and its being blown out of proportion in headline news.

What Silvergate is doing is required by law/regulations. Their auditors require more financial information from the bank in order to accurately file a report to the SEC, hence the delay...are delays in filing with the SEC common? Well, not really, but they happen often enough that its not something to get worked up about. But crypto is in the spotlight so damage points count for double.

Silvergate said that as a result of the crypto shitshow of 2022 that they may be "less than well capitalized". What does that mean? Basically, there are five categories:

1. Well Capitalized
2. Adequately Capitalized
3. Undercapitalized
4. Significantly Undercapitalized
5. Critically Undercapitalized

The first two are fine. It means the fed's are happy with the banks capital and leverage ratio and they can carry on. Undercapitalized is not great, but the bank can probably carry on under restricted activities. The last two are bad and the bank may likely have to cease operations.

What we are gambling on is that when Silvergate releases their report on March 16th, what category are they in? Are they truly fucked and have to close? Something tells me that they will come back as undercapitalized but will remain open for business, but their crypto operations will be heavily restricted for sure.