Shares of Silvergate Capital (SI), a crypto-focused bank, tumbled more than 41% after announcing more than 200 job cuts, bringing its stock price to about $12.89.
The bank is considering suspending plans to launch a digital currency and cutting off the bad debt from its acquisition of Diem Association from Meta (FB), if anyone remembers. In February of last year, Diem announced that Silvergate would be acquiring the company’s assets and technology.
But for now, the bank appears to have decided to write off bad debt to maintain liquidity. Silvergate’s CEO said:
“As the digital asset industry in the fourth quarter has seen a lot of changes. We have taken reasonable steps to ensure that we maintain our cash liquidity in line with our expenditures,” Silvergate CEO Alan Lane said.
With Celsius and FTX liquidity crises, the crypto market has taken a huge toll on the market, but Silvergate’s Exchange Network platform is still in service, with a trading volume of about 1.3. Billion dollars per day during Q4 2022, up from $1.2 billion in the previous quarter.
However, during the fourth quarter of 2022, approximately $8.1 billion of digital assets had been withdrawn, forcing Silvergate to sell $5.2 billion in debt securities, resulting in a loss of $718 million.
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