BlocksInform
The collapse of the FTX has sped up layoffs at a time when the industry is struggling to survive the relentless turmoil.
Crypto-focused bank – Silvergate Capital – has become the latest to slash 40% of its workforce, which is around 200 employees, according to a Wall Street Journal report on Thursday.
The news arrives while the bank has undergone massive withdrawals from the clientele. In a statement, Silvergate said,
“As we enter a new year and continue to navigate the current environment, we are focusing our strategy to provide the most value-added solutions for our core digital asset customers.”
- In an early release of part of Silvergate's fourth quarter earnings, the bank said that deposits related to cryptography fell by a 68 percent major from $11.9 billion to $3.8 billion.
- As of late 2022, $150 million of Silvergae's deposits were held by clients who had filed for bankruptcy.
- There was a lack of liquidity over that period of time. As a result, the company used the liquidation of its balance sheet debt to make withdrawals. Along the way, the company lost $718 million, which is significantly higher than its total profits since 2013.
- The Californian company also plans to put the launch of its own digital currency project on the back burner, write off the $196 million that he paid social media giant Facebook to buy the technology he built for Diem.
- As a result of the activity update, Silvergate shares fell more than 47% on pre-market trading.
- The failure of ftx sent silvergate on a bank race that forced the platform to sell assets at a substantial loss to cover some 8.1 billion dollars in withdrawals.
- The drop in investor confidence has led to a significant drop in deposits. But Silvergate could function in such a turbulent era because it's structured very differently than most banks.
- Despite the slowdown, the bank has assured its customers that it has enough funds to deal with a "period of sustainable transformation."
