Silvergate Announces 40% Job Cut, Halts Plans to Acquire Diem’s Assets

Silvergate has laid off 40% of its staff as fallout sparked by FTX collapse worsens amidst the crypto winter.

A guy packing up his stuff from the office in front of Crypto Bank Silvergate logo.

Silvergate, a crypto-focused bank, has been forced to cut 40% of its staff as the fallout sparked by the collapse of Sam Bankman-Fried’s empire worsens. It has also halted the acquisition of assets related to Diem.

Silvergate Lays Off 40% of Staff

Silvergate Capital, a Federal Reserve member bank listed on the New York Stock Exchange, announced in a Thursday, January 5th filing that it has laid off 40% of its staff. This is about 200 employees.

Silvergate explained that during the “crisis of confidence” late last year forced by the collapse of FTX and Alameda Research, its clients pulled $8.1 billion in deposits.

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Affected by the FTX collapse, Silvergate has also halted plans to launch a digital currency. It has also written off the $196 million related to its acquisition of the technology and assets of Diem.

Silvergate’s Stock Plummets by 43%

The California-based group disclosed its preliminary fourth-quarter results, showing its deposits from digital assets.

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In the report, Silvergate revealed that it sold $5.2 billion worth of debt at a loss of $718 million. Shares of Silvergate Capital sank 42.7% on Thursday after the crypto-focused bank released preliminary fourth-quarter results. 

On the Flipside

  • The layoffs at Silvergate come just after the bank announced it has ample liquidity.

Why You Should Care

Silvergate’s decision underscores how the implosion of FTX affected the regulated financial sector.

Silvergate’s exposure to BlockFi is covered in:
Silvergate (SI) Says It Has Less Than $20M of BlockFi Deposit Exposure

The previous claims of Silvergate are covered in:
Silvergate (SI) CEO Attempts to Defend Company, Says It Has ‘Ample Liquidity’

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Milko Trajcevski

Milko Trajcevski is a DailyCoin news reporter, mainly focused on Ethereum (ETH), Cardano (ADA), and their founders (Vitalik Buterin and Charles Hoskinson). Milko is an avid follower of crypto and blockchain technology and has written thousands of articles on the subjects. He finds joy in transforming complex issues into written content that anyone can understand. Milko has used and analyzed numerous exchanges, such as Coinbase, FTX, and Binance. He also closely follows all of the latest news around the largest decentralized exchanges (DEXs). Location: Skopje, Macedonia