Silvergate plunges after crypto meltdown triggered deposit run

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Silvergate plunges after crypto meltdown triggered deposit run

By Daniela Kirova - min read
  • Silvergate held deposits for FTX units and Alameda Research
  • Silvergate appears to be most at risk from what happened to FTX  
  • Shares plunged by more than 40%  

Shares of crypto bank Silvergate Capital Corp. have plummeted. The company says the crypto industry’s breakdown caused a run on deposits, prompting it to fire 40% of its staff and sell assets at a major loss. 

Silvergate held deposits for FTX units and Alameda Research, the company at the core of the crypto exchange’s collapse. Su Keenan reports on Bloomberg Television.

The FTX collapse continues to have ramifications

The bank Silvergate is reeling. It appears to be most at risk from what happened to FTX. They made a big bet on crypto, but the FTX collapse put it in crisis. It’s down 42% in the latest session. It was holding funds and assets for many of these crypto entities, Bloomberg TV reported. 

Shares plummeted by over 40% 

Shares plunged by more than 40% after customers withdrew the equivalent of $1.1 billion of these digital assets deposits in the fourth quarter. That forced Silvergate to load off assets and fire 40% of staff, which put the bank in further crisis. 

Regulators are also eyeing the bank 

Lawmakers are scrutinizing the bank itself due to its affiliation with FTX and some of its deposits. Meanwhile, crypto broker Genesis has laid off 30% of its staff and the former CEO of bankrupt crypto lender Celsius is being sued by the New York Attorney General for defrauding investors. 

All of this news is tarnishing the space even further and dispersing gloom throughout the industry.