Cryptocurrency

Silvergate Capital bank forced to sell assets at loss, fires 40% of staff

Hull Invest

Silvergate Capital has been forced to sell loss-making assets to cover an $8.1 billion bank run.

In response to the crisis, Silvergate laid off about 200 employees (40% of its staff) and announced plans to “reduce operations.” Wall Street Journal.

Silvergate liquidated its balance sheet liabilities resulting in a loss of $718 million. This is more than “total bank profits since at least 2013.”

Silvergate operates a network that primarily serves companies in the cryptocurrency industry, accepts deposits, and connects cryptocurrency exchanges to investors.

“FTX and other companies controlled by its founder Sam Bankman-Fried accounted for about $1 billion in bank deposits.”

Unlike other banks, Silvergate uses a business model focused on providing bank accounts to cryptocurrency exchanges and investors, with crypto-related deposits accounting for approximately 90% of the bank’s total. Equivalent. That’s why Silvergate was able to withstand the “deep drop in deposits.”

and statementSilvergate said:

“As we enter the new year and continue to navigate the current environment, we are focused on our strategy to deliver the most value-added solutions to our core digital asset customers.”

At the end of the fourth quarter of 2022, Silvergate said it had about $4.6 billion on hand. This tops “his $3.8 billion in remaining deposits.”

Recently hit by a class action lawsuit, Silvergate has been accused of having an affair with FTX founder Sam Bankman-Fried (SBF).

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