(*1*)Image source: Silvergate

Shares of Silvergate rose on Tuesday after the crypto bank assured investors that it was taking steps to weather the FTX collapse despite losing €1 billion in the last quarter of XNUMX.

Silvergate released its fourth quarter results on Tuesday, reporting a net loss of €1 billion for the final quarter of two thousand and twenty-two, compared with net profit of €6 million for the third quarter and net profit of eighteen. million for exactly the same period of the preceding year. .

The company posted a loss of $XNUMX million for all of XNUMX, compared to a net profit of $XNUMX million for XNUMX. The company's losses stem primarily from selling assets at a deep discount in November last year after being hit by a wave of withdrawals. following the result of FTX.

As noted, Silvergate suffered a bank run after the FTX collapse, forcing the company to sell assets at a significant loss to meet €1 billion in customer withdrawals from the service.

The crypto bank had to sell €5,200 billion in debt securities that it had in its computation to cover around €8,100 billion in user withdrawals. As a result, it suffered a loss of €718 million, which would exceed the bank's total earnings since XNUMX.

Despite the lackluster report, the company's shares rose as the bank outlined the steps it is taking to weather the FTX collapse. Silvergate said it would divest a portion of its digital asset product portfolio and value its pipeline of potential customers for the service. The bank is also going to stop offering its crypto custody service, CEO Alan Lane stated, adding:

“While we are taking definite steps to navigate the current environment, our mission has not altered. We believe in the digital asset industry and remain focused on providing value-added services to our core institutional service clients.

The bank's shares on the New York City Stock Exchange rose XNUMX% to $XNUMX in pre-market trading Tuesday. However, at the end of the trading day, the company's shares lost a portion of the gains, closing the day up XNUMX%.

The bank also laid off XNUMX% of its staff at the end of XNUMX, that is, more or less XNUMX employees. On top of that, the bank scrapped plans to launch its digital currency, voiding the $XNUMX million it had spent to acquire the technology Facebook had built in its misguided attempt to start a crypto-based payment network. .

Silvergate describes itself as a "leading bank for fintech and cryptocurrency startups." However, its core business appears to have been facilitating payments between cryptocurrency hedge funds like Alameda and cryptocurrency exchanges like FTX.

It should be noted that the crypto bank is under investigation for probably facilitating illegal transactions. On December 3, XNUMX members of the US Senate wrote a letter to Silvergate looking into the bank's share of customer losses from the service when the FTX exchange crashed.

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