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#The Wall Street Journal: Silvergate lost more than $700 million selling assets to cover withdrawals during crypto selloff

#The Wall Street Journal: Silvergate lost more than 0 million selling assets to cover withdrawals during crypto selloff

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“The Wall Street Journal: Silvergate lost more than $700 million selling assets to cover withdrawals during crypto selloff”

Bank sold assets at a loss to cover withdrawals and cut 40% of its staff but remains committed to crypto

The collapse of crypto exchange FTX sparked a run on Sivergate Capital Corp., forcing the bank to sell assets at a steep loss to cover some $8.1 billion in withdrawals.

Crypto-related deposits plunged 68% in the fourth quarter, the bank said in an early release of some quarterly results. To satisfy the withdrawals, Silvergate liquidated debt it was holding on its balance sheet. The $718 million it lost selling the debt far exceeds the bank’s total profits since at least 2013.

The bank
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+27.10%

has laid off 40% of its staff, or about 200 employees, and said it would pare back its businesses. It shelved a plan to launch its own digital currency, writing off $196 million it spent buying the technology that Facebook had built in its failed attempt to start a crypto-based payments networks.

Silvergate caters to companies in the crypto business, taking their deposits and operating a network that links investors to crypto exchanges. FTX and other companies controlled by its founder, Sam Bankman-Fried, accounted for about $1 billion of the bank’s deposits. Their November collapse rattled the crypto market and sent Silvergate’s stock down sharply.

An expanded version of this report appears at WSJ.com.

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