Silvergate shares slide as crypto-focused bank says $8.1 billion withdrawn
The collapse of crypto exchange FTX sparked a run on Sivergate Capital Corp., forcing the bank to sell assets at a steep loss to cover some $8.1 billion in withdrawals.
Crypto-related deposits plunged 68% in the fourth quarter, the bank said in an early release of some quarterly results. To satisfy the withdrawals, Silvergate liquidated debt it was holding on its balance sheet. The $718 million it lost selling the debt far exceeds the bank’s total profits since at least 2013.
The bank SI, +27.10% has laid off 40% of its staff, or about 200 employees, and said it would pare back its businesses. It shelved a plan to launch its own digital currency, writing off $196 million it spent buying the technology that Facebook had built in its failed attempt to start a crypto-based payments networks.
Silvergate caters to companies in the crypto business, taking their deposits and operating a network that links investors to crypto exchanges. FTX and other companies controlled by its founder, Sam Bankman-Fried, accounted for about $1 billion of the bank’s deposits. Their November collapse rattled the crypto market and sent Silvergate’s stock down sharply.‘Romeo and Juliet’ stars sue Paramount over teen nude scene in 1968 film.
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