Silvergate Stock Plummets 45% on Major Staff Cuts, Massive Withdrawals
The bank revealed it weathered a run that saw customers withdraw more than $8 billion from accounts
Exclusive art by Axel Rangel modified by Blockworks
In a preliminary fourth quarter earnings report, crypto bank Silvergate revealed it weathered a run that saw customers pull more than $8 billion from accounts. The bank was forced to sell assets at a major loss to fulfill the withdrawals.
“The digital asset industry has undergone a transformational shift, with significant over-leverage in the industry leading to several high-profile bankruptcies,” Silvergate wrote in the update Thursday.
“These dynamics have sparked a crisis of confidence across the ecosystem and led many industry participants to shift to a ‘risk off’ position across digital asset trading platforms.”
The bank, which counts Coinbase, Kraken and Circle among clients, also revealed it would be cutting 200 positions, or about 40% of its staff, in an effort to reduce costs.
Silvergate shares plummeted more than 40% in pre-market trading before opening an additional 14% lower at the start of Thursday’s session, sitting at -46% for the day as of 10:30 am ET.
Silvergate also serviced the ill-fated FTX right up until its demise, leading to contagion concerns since November. Silvergate stock is now down 90% since this time last year, having dropped from $129.49 to $11.82 at press time. The company was worth more than $5.5 billion in late 2021 – now only $380 million.
Fellow crypto bank Signature also started Thursday in the red with shares falling around 4.5% in the morning.
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