Customers withdrew more than $8 billion from the crypto-focused bank over the last three months of 2022.
Silvergate Capital revealed Thursday a series of worrisome financial metrics—including $8.1 billion in withdrawals near the end of last year—connected to the shocking collapse of its top client FTX, sending its stock spiraling, as the cryptocurrency-focused financial institution treads water.... [+]in its preliminary quarterly report, bringing its total digital asset deposits down 68% from $11.9 billion to $3.2 billion.
To fund that run, which coincided with the high-profile unraveling of Silvergate’s high-profile client FTX, Silvergate sold $5.2 billion worth of debt securities at a $718 million loss and fired 40% of its employees . Silvergate disclosed Thursday that about $150 million of the bank’s deposits were from bankrupt clients, an apparent reference to FTX’s holdings at the institution, and Silvergate previouslyIn a statement, the company attributed the recent run to a “crisis of confidence across the [crypto] ecosystem.”
Shares of Silvergate dropped 47% in early trading Thursday, and the stock is down about 75% since FTX began to fall apart in early November.to work with crypto clients, branding itself as the leading financial institution in the digital asset space. The company rode the crypto boom to great heights, with its stock gaining more than 1,700% from its $12 per share 2019 initial public offering to its late 2021 peak of $220.
Wednesday to a $100 million payout to settle a probe from New York financial authorities for doing the “bare minimum” to meet compliance and anti-money laundering requirements.
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