“Silvergate” bank lost 1 billion dollars last year
American bank “Silvergate Capital Corp” published its financial performance report for the fourth quarter of 2022 on Tuesday. According to this report, this company recorded a loss of about 1 billion dollars last year. This bank, which witnessed the withdrawal of 8 billion dollars of capital by its customers last year, considered the crisis of confidence in the digital currency sector to be the main cause of this loss.
According to Wallex and quoted by Forkast, this Californian bank registered a loss worth 949 million dollars in 2022. Meanwhile, in the previous year, this bank had a positive performance balance worth 75.5 million dollars.
The bank’s shares fell 2.9 percent to $12.94 on Tuesday. The stock price of this bank has lost nearly 90% of its value in the last 12 months.
Alan Lane, Chief Executive Officer of Silvergate, said in the published statement:
Although we are making major decisions to manage the current situation, our overall mission has not changed. We believe in the digital currency industry and will focus on providing value added services to our core institutional clients. To achieve this goal, we are committed to maintaining a strong and liquid balance sheet in order to be in a good position from the point of view of capital.
Silvergate retrenched 40% of its employees (about 200 people) in January following the collapse of the FTX exchange. This collapse and similar cases caused prices to fall in the digital currency market. This caused the panic of investors and massive withdrawal of capital from this bank. The customers of this bank withdrew 8 billion dollars of their capital from the company last year. The liquidity crisis forced Silvergate to sell its debt at a loss of $718 million to meet withdrawal requests.
This influx of customers caused Cathie Wood, whose investment fund (ARK Fintech) was one of the main supporters of Silvergate, to sell 99% of her shares.
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