Silvergate, a crypto-focused bank, has been forced to cut 40% of its staff as the fallout sparked by the collapse of Sam Bankman-Fried’s empire worsens. It has also halted the acquisition of assets related to Diem.
Silvergate Lays Off 40% of Staff
Silvergate Capital (NYSE:SI), a Federal Reserve member bank listed on the New York Stock Exchange, announced in a Thursday, January 5th filing that it has laid off 40% of its staff. This is about 200 employees.
Silvergate explained that during the “crisis of confidence” late last year forced by the collapse of FTX and Alameda Research, its clients pulled $8.1 billion in deposits.
Affected by the FTX collapse, Silvergate has also halted plans to launch a digital currency. It has also written off the $196 million related to its acquisition of the technology and assets of Diem.
Silvergate’s Stock Plummets by 43%
The California-based group disclosed its preliminary fourth-quarter results, showing its deposits from digital assets.
In the report, Silvergate revealed that it sold $5.2 billion worth of debt at a loss of $718 million. Shares of Silvergate Capital sank 42.7% on Thursday after the crypto-focused bank released preliminary fourth-quarter results.
On the Flipside
- The layoffs at Silvergate come just after the bank announced it has ample liquidity.
Why You Should Care
Silvergate’s decision underscores how the implosion of FTX affected the regulated financial sector.
Silvergate’s exposure to BlockFi is covered in:
Silvergate (SI) Says It Has Less Than $20M of BlockFi Deposit Exposure
The previous claims of Silvergate are covered in:
Silvergate (SI) CEO Attempts to Defend Company, Says It Has ‘Ample Liquidity’