- Silvergate Bank lays off 230 staff amid crypto market turbulence.
- Regulator concerns and asset valuation are top priorities for Silvergate Bank.
- Silvergate Bank downsizes and struggles to meet filing deadlines.
After closing in March, Silvergate Capital, a cryptocurrency-friendly bank that served industry giants like Coinbase and Gemini, is continuing to wind down. On Thursday, the company announced it would be laying off 230 workers, leaving only a core group of 80 to oversee the liquidation. A rough year for Silvergate saw customers withdraw $14 billion following the fall of FTX, the crypto empire created by Sam Bankman-Fried, leading to the layoffs.
Protecting Worth while Answering Compliance Questions
Silvergate told the SEC that its surviving personnel will handle regulator concerns, asset valuation, and bank and parent company investigations. The bank has enough cash to repay depositors as it sold all of its debt instruments.
Silvergate already eliminated 200 jobs, or 40% of the staff, in January before announcing more layoffs on Thursday. The company gave the difficult macro environment as the reason for the layoffs at the time.
Failure to Meet Filing Deadlines
Silvergate is still unable to meet its filing duties and does not plan to produce audited financial statements in an effort to cut costs, despite the layoffs and the closure of the bank. After delaying a key filing with the SEC in March, the bank’s stock price plummeted as investors worried about its viability as a going concern.
The digital assets market grieved the loss of Silvergate Bank, one of the major crypto-friendly banks, but the failure of other institutions such as Signature Bank and Silicon Valley Bank just days later masked it.
According to Ycharts, Silvergate’s total assets were roughly $11 billion at the end of last year, down 29% from the previous year’s rising digital assets industry. Signature and SVB were much larger in comparison, with total assets of around $110 billion and $209 billion as of the end of the previous year.
In conclusion, the layoffs at Silvergate represent yet another challenging stage in the wind-down process for the crypto-friendly bank. On the bank’s closing days, the remaining staff will concentrate on protecting value and responding to requests from regulators.
