The Silvergate Bank has reported a net loss of $1 billion in the last quarter of 2022. The company is also facing litigation.
Large outflow of deposits
In the last quarter, Silvergate saw a significant outflow of deposits. They then took measures to maintain cash liquidity, including the sale of debt securities.
She also highlighted a transformational shift in the digital asset space. According to Silvergate, a crisis of trust across the entire ecosystem has led clients to take a risk-free position on crypto trading platforms.
Silvergate reportedly saw around $7.3 billion in deposits in the last quarter of 2022. This amount is significantly lower than a quarter earlier, when it was around $12 billion.
Many staff had to be laid off
Despite the significant losses, the company is reportedly preparing for a sustained period of lower deposits. Because of this, the company is reportedly evaluating its product portfolio and customer relationships.
Still, the company continues to believe in the crypto industry and remain committed to “maintaining a highly liquid balance sheet with a strong capital position.”
Despite a ‘strong capital position’, they had to lay off some 40% of their workforce, or about 200 employees, earlier this month. They have also suspended some projects, which means that more money must be made available again to help the company keep its head above water. However, the problems could be temporary, but for now the outlook seems negative.