Silvergate, the bank specializing in digital assets, resorted to laying off 40% of its staff. At the same time, the company had to sell assets to stabilize its balance sheet, resulting in $718 million in losses.
Silvergate ends 2022 with inconclusive results
Silvergate, the well-known institutional player specializing in digital assets, has informed that it has laid off 200 people on January 4, which represents 40% of its workforce. This announcement comes ahead of the publication of its figures for the last quarter of 2022, and the company has already communicated on several important data.
To carry out these dismissals, the company spent $8 millionwhich mainly include severance pay and other social benefits.
Regarding customer deposits, while these amounted to 11.9 billion dollars as of September 30, this same metric recorded a significant drop three months later, now standing at $3.8 billion. This is therefore equivalent to a 68% reduction.
It should also be noted that among all these deposits, $150 million came from customers who are now bankrupt.
In addition, Silvergate was forced to sell at a loss in order to maintain a healthy balance sheet. These sales represent $5.2 billion in assets, and resulted in a loss of $718 million for the company in the last quarter of 2022.
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Diem: objectives revised downwards after the purchase of assets
In early 2022, Meta sold Diem’s assets to Silvergate after encountering multiple difficulties in building its stablecoin project. Today, Silvergate has shelved its ambitions to build a blockchain-based payments system, and sees the affected assets depreciate by $196 million.
This downward reconsideration of the company’s ambitions is justified by the current context of the cryptocurrency ecosystem:
“Given the significant changes in the landscape of the digital asset industry, this charge reflects the company’s belief that the launch of a blockchain-based payment solution by Silvergate is no longer imminent. The company will continue to seek opportunities to deliver value from these technology assets. »
Despite all this negative news, Silvergate still has own cash of 4.6 billion dollars. The time is therefore not for a liquidity crisis, which should all the same reassure investors, whereas some time ago, the company had to communicate about BlockFi. Indeed, the latter went bankrupt in the wake of the FTX affair, and Silvergate was exposed to it to the tune of 20 million dollars.
At the time of writing, Silvergate stock was trading priced at $21.95 at the New York Stock Exchange.
👉 Also in the news – Cryptocurrency payments expert Wyre soon to go bankrupt
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