Shares of the crypto world’s bank, Silvergate Bank, plunged more than 30 percent yesterday following the release of its annual 10-K report. A 10-K report is a document that publicly traded companies are required to file with the Securities and Exchange Commission (SEC). It provides an overview of the financial health of companies.
Problems at Silvergate
The crypto bank shares that it needs about two more weeks to finalize its full fiscal year 2022 report. In the document, Silvergate Bank also explains that it took on additional debt in January and February.
“Those additional losses will negatively impact the company’s capital ratios and could result in Silvergate Bank being less than well capitalized,” the document read in highly legal language.
Silvergate Bank also indicates that it is currently evaluating whether the events of the past few months mean that it may not be able to survive the next 12 months. “The Company is currently in the process of re-evaluating its business and strategy in light of the challenges it now faces,” said Silvergate Bank.
Problems for crypto?
If you ask Adam Cochran, an influencer on Twitter, the death spiral Silvergate Bank is currently in is bad for the industry. “I think many retail investors don’t realize how much market makers and crypto exchanges bank with Silvergate. The stock is near an all-time low in after-trade,” Cochran said.
Nothing is certain yet, of course, but if things continue like this, there seems to be a chance that Silvergate Bank will not make it to the end of the year. In any case, the stock has plummeted quite a bit since yesterday.
As you can see, damage was not too bad during the day yesterday until the company released its 10-K. Shortly thereafter, the stock plummeted and a sell-off began that may not be over yet.
