Silvergate Layoffs 200 Employees Following FTX Domino Effect

  • Silvergate wrote off the $196M amount paid to Facebook as per the recent announcement.
  • Around 40% of Silvergate Capital’s staff has reportedly been let go.

Officially announcing the acquisition of Diem Group, a Facebook-affiliated firm, and its intellectual property and other technology assets essential to run the blockchain-based payment system, Silvergate made the deal public in February of last year.

In 2021, Facebook stopped working on its digital currency project because of intense scrutiny from governments and regulators. Silvergate wrote off the $196M amount paid to Facebook as per the recent announcement.

When deciding which business would issue the USD-based stablecoin, Facebook’s initial pick was Silvergate. The Federal Reserve issued a warning to Silvergate and threatened to freeze the business, thereby ending Meta’s blockchain ambitions.

Trying to Survive the Sluggish Market

Silvergate Capital Corp. had a run on its accounts after the collapse of cryptocurrency exchange FTX, and the bank had to sell assets at a loss of almost $8.1 billion to meet withdrawals.

In addition, Silvergate said that it will keep looking for further ways to monetize these technology assets. The cryptocurrency-friendly bank has purchased Facebook-owned software assets with the goal of releasing the cryptocurrency in its original form by the end of 2022.

Around 40% of Silvergate Capital’s staff has reportedly been let go. An official report from the Crypto-Centric bank states that 200 people were laid off last Thursday. A 68% decrease in cryptocurrency-related deposits was reported in the bank’s early publication of quarterly results for the fourth quarter of 2022.

Silvergate (SI) stock is presently selling at a pre-market price of $13.20, which is a massive -40% drop from its last traded value of $21.95.

The cryptocurrency bank is taking many measures to ensure the continuity of the business. Changes to the company’s spending base, such as its projections for the future of its product line and customer base, are part of these plans.

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An engineering graduate who is passionate about writing and loves the very existence of crypto. Trading forex currency keeps me busy when I am not writing and analysing the crypto world.