Silvergate, a cryptocurrency-focused bank, has reported a net loss of $1 billion for shareholders for the quarter ending December 31, 2022.
In a report filed with the United States Securities and Exchange Commission (SEC), the bank acknowledged significant deposit outflows during the last quarter of 2022 and said it took measures to maintain cash liquidity, including wholesale funding and the sale of debt securities.
The bank also noted a significant shift in the digital asset market, stating that users were avoiding taking risks on cryptocurrency trading platforms due to a general loss of confidence in the ecosystem.
The loss significantly contrasts the prior quarter’s net income of $40.6 million and the comparable quarter in 2021’s net income of $18 million. Compared to net profits of $75.5 million in 2021, the losses in the fourth quarter led to full-year losses of approximately $949 million.
Despite the losses, Silvergate stated that it is taking steps to prepare for a prolonged period of reduced deposits. The company is managing its expense base, evaluating its product portfolio, and reviewing customer relationships.
Alan Lane, the chief executive officer of Silvergate, stated:
“While we are taking decisive actions to navigate the current environment, our mission has not changed.”
Lane expressed confidence in the digital asset market and stated that the company’s focus would continue to be on offering value-added services to its core institutional clients. He emphasized that the company is committed to maintaining a very liquid balance sheet and a strong capital position.
Silvergate Bank is currently facing a class-action lawsuit over its dealings with FTX and Alameda Research. The suit alleges that Silvergate aided and abetted FTX’s fraudulent activities and the exchanges’ violations of fiduciary duty through erroneous transfers, lending user funds, and comingling funds.
As a result, Silvergate is being held liable for furthering FTX’s investment fraud and is required to pay back any money owed to the plaintiff and other investors.
If you would like to read more news articles like this, visit DeFi Planet and follow us on Twitter, LinkedIn, Facebook, and Instagram.
“Take control of your crypto portfolio with MARKETS PRO, DeFi Planet’s suite of analytics tools.”
