A series of worrisome financial metrics, including $8.1 billion in withdrawals near the end of last year, were revealed by Silvergate Capital on Thursday.
The opening bell of the New York Stock Exchange is rung by Silvergate.
Silvergate's total digital asset deposits have fallen from $11.9 billion to $3.2 billion in the last three months.
In order to fund that run, Silvergate sold $5.2 billion of debt securities at a $718 million loss and fired 40% of its employees.
Silvergate said Thursday that about $150 million of the bank's deposits were from bankrupt clients, an apparent reference to FTX's holdings at the institution.
The company said that the recent run was due to a crisis of confidence in the industry.
Since FTX began to fall apart in November, the stock of Silvergate has lost 75% of its value.
One of the first banks to work with digital asset clients was Silvergate. The company's stock gained more than 1,700% from its IPO price of $12 per share to its late 2021 peak of $220. Just as Silvergate enjoyed the rapid rise in value and popularity of digital assets, it was crushed by the industry's decline, with its lowest share price in over a year. According to CoinGecko, the total market cap of all cryptocurrencies is about $850 billion.
Authorities ordered the seizure of $93 million worth of FTX funds held at Silvergate last month, as well as taking over or planning to seize more than $460 million worth of shares in retail trading platform Robinhood held by FTX.
One of the few publicly traded companies that deals with digital assets alongside Silvergate's shares fell during early Thursday trading. A $100 million settlement was reached with the New York financial authorities for doing the "bare minimum" to meet compliance and anti-money-laundering requirements.
Sam Bankman-Fried is facing fraud charges.
After regulators find "Significant Failures" heightened risk of criminal activity, the company will pay 100 million dollars.
All Rights Reserved © 2024
