In an effort to recover from the effects of FTX’s failure, cryptocurrency-focused bank Silvergate announced a $1 billion loss for the fourth quarter, revealed that 200 employees had been let go, and announced that it would be offboarding some clients.
Deposits for FTX companies and Almeda Research were held at Silvergate. Customers of the bank withdrew more than $8 billion in deposits of digital assets after the exchange failed.
In order to meet the costs and maintain liquidity, Silvergate was compelled to sell $5.2 billion in assets at a loss, which resulted in the fourth quarter deficit.
The bank claims that in order to get ready for a “sustained phase of transformation,” it would shed some of its non-core clientele and part of its product line.
Additionally, it has acknowledged that 200 employees, or 40% of its personnel, have been let off, and that the $196 million it spent to acquire the Diem assets used by Facebook has been written down.
Alan Lane, CEO, Silvergate, says: “While we are taking decisive actions to navigate the current environment, our mission has not changed. We believe in the digital asset industry, and we remain focused on providing value-added services for our core institutional customers.
“To that end, we are committed to maintaining a highly liquid balance sheet with a strong capital position.”