Silvergate claims that in the fourth quarter of 2022, it experienced “significant outflows of deposits.”
Silvergate Bank, a Californian bank that specializes in providing financial infrastructure to the cryptocurrency trading industry, has recorded a $1 billion net loss in the fourth quarter of 2022.
According to the report shared by the US Securities and Exchange Commission (SEC), during the fourth quarter, Silvergate saw “significant outflows of deposits” and took several steps to ensure “cash liquidity.”
Did you know?
Want to get smarter & wealthier with crypto?
Subscribe - We publish new crypto explainer videos every week!
What is an Automated Market Maker in Crypto? (Animated)
Silvergate Bank claims that it managed "cash liquidity" by selling debt securities and utilizing "wholesale funding.” On top of that, the bank is reportedly preparing for “a sustained period of lower deposits.”
When talking about the current market situation, Silvergate chief executive officer (CEO) Alan Lane stated:
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.
The report revealed that during the fourth quarter of 2022, Silvergate Exchange Network (SEN) handled $117 billion worth of transfers. Compared to the same period last year, the value of transfers decreased by 47%. In the fourth quarter of 2021, SEN handled transfers worth $219 billion.
In addition, the average digital asset customer deposits were $7.3 billion in Q4 of 2022, while in the third quarter of 2022, on average, customers deposited around $12 billion.
In the report, Silvergate Bank revealed that it is currently reviewing its expense base and “evaluating its product portfolio and customer relationships going forward.” Moreover, a California-based bank noted that it has decided to reduce its workforce.
It is worth noting that recently, Silvergate laid off approximately 200 employees, which make up around 40% of its workforce.