Silvergate, the crypto-bank which announced the layoff of 40% of its staff at the beginning of the month, has just revealed its balance sheet for the last quarter of the year 2022. The latter reports a net loss of more than one billion for the bank, as well as a noticeable drop in the value of its shares.
Silvergate in bad shape
The crypto bank silver gate reveals a disturbing assessment: according to its latest report, it suffered $1 billion in net losses attributable to its various shareholders in the last quarter of 2022. In comparison, during the third quarter of 2022, the bank still posted a net profit of 40.6 million dollars over the period.
Figure 1 – Results for the last quarters of 2021 and 2022
According to the report, the crypto bank meanwhile lost $33.16 per common shareand was able to observe a profit of 1.28 dollars per diluted share as of September 30, 2022.
By comparison, for the whole of 2021, Silvergate’s operations had net profit of more than $75.5 million for the company. Here, throughout 2022, Silvergate posts net loss of over $948 million.
Figure 2 – Annual net losses attributable to shareholders
We can also see that in the last quarter of 2022, Silvergate customer deposits fell sharply compared to the previous one: they have thus gone from 12 billion to “only” 7.3 billion dollars, a difference of $4.7 billion.
According to Silvergate, there has been a noted “transformational change” within the cryptocurrency ecosystem, which is believed to be the result of a crisis of investor confidence and which has, ultimatelyled to an exodus from centralized platforms. An observation to make against the backdrop of FTX’s bankruptcy.
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The crypto-bank wants to adapt to the market
Faced with this paradigm shift and forced to take action in the face of these considerable losses, Silvergate Announces Reconsidering How Its Expenditures and Portfolio Are Structured. To keep its cash afloat, the company says it has resorted to wholesale funding and the sale of debt securities.
On his side, Alan Lane, CEO of the companywas keen to maintain a position of trust vis-à-vis the crypto ecosystem:
“While we are taking decisive action to navigate the current environment, our mission has not changed. We believe in the digital asset industry, and we remain focused on providing value-added services for our core institutional clients. To this end, we are committed to maintaining a very liquid balance sheet with a strong capital position. »
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We announced it to you at the beginning of the month, faced with this considerable drop still not revealed, Silvergate had found itself forced to lay off 40% of its staff, or approximately 200 employees.
Finally, clarifications are also expected regarding the relationship between Silvergate and FTX. Indeed, on December 6, 3 US senators have written to the crypto bank to assess its role in the defunct exchange’s multi-billion dollar loss.
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Source: Report
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Passionate about the world of decentralized finance and the novelties brought by Web 3.0, I write articles for Cryptoast to help make blockchain more accessible to everyone. Convinced that cryptocurrencies will change the future very soon.
Maximilien Prue
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