Silvergate Capital's crypto-related deposits plunge in fourth quarter

3 weeks ago 79

Jan 5 (Reuters) - Silvergate Capital Corp's (SI.N) crypto-related deposits plummeted in the fourth quarter, according to a preliminary earnings report on Thursday, as souring crypto sentiment following the collapse of FTX exchange led to a surge in withdrawals.

The company also said it was reducing its headcount by 40%, or roughly 200 employees, in the wake of an industry downturn.

Total deposits from digital asset customers declined to $3.8 billion at the end of Dec. 31, 2022, compared with $11.9 billion at Sept. 30, 2022.

To maintain liquidity, the bank sold $5.2 billion of assets at a loss of $718 million in the fourth quarter.

More than a trillion dollars in value was wiped out from the crypto sector last year with rising interest rates exacerbating worries of an economic downturn. The crash has eliminated key industry players such as crypto hedge fund Three Arrows Capital and crypto lender Celsius.

Still, the biggest blow to the sector came after major crypto exchange FTX filed for bankruptcy protection in November. Its swift fall has sparked tough regulatory scrutiny of how crypto firms hold funds and conduct business operations.

Reporting by Manya Saini in Bengaluru; Editing by Subhranshu Sahu

Our Standards: The Thomson Reuters Trust Principles.

Read Entire Article