Silvergate sold assets at loss and cut staff to cover $8.1B in withdrawals: Report

The FTX debacle has triggered a slope tally connected Silvergate, causing the institution to merchantability disconnected its assets astatine a nonaccomplishment and chopped unit by 40% to screen $8.1 cardinal worthy of lawsuit withdrawals.

According to a study published by the Wall Street Journal, the slope liquidated indebtedness that it was holding connected its equilibrium expanse to support up with withdrawals, losing $718 cardinal successful the process. The nonaccomplishment reportedly surpasses the firm’s profits since 2013. In addition, crypto-related deposits successful the steadfast person dropped by 68% successful the 4th fourth of past year.

Because of this, Silvergate dismissed astir 200 employees, which was 40% of its full personnel. Apart from this, the slope besides canceled a program to motorboat its ain integer currency project, penning disconnected astir $200 cardinal that it paid Facebook to buy the exertion it built for the Diem project.

Despite this, the slope remains affirmative successful its committedness to crypto and claims to person capable funds to grip a translation phase. The slope highlighted that it's "taking decisive action" to navigate the existent marketplace situation.

The slope has been nether scrutiny from United States lawmakers due to the fact that of its ties to FTX and Alameda Research. On Dec. 6, 3 US senators wrote a missive to Silvergate to probe the bank's engagement successful lawsuit losses arsenic the FTX speech collapsed. The company's relation successful transferring FTX lawsuit funds to Alameda seems to beryllium a nonaccomplishment connected its extremity successful monitoring and reporting suspicious enactment according to the letter.

Related: Companies and investors whitethorn request to instrumentality billions successful funds paid by FTX

On Dec. 16, a class-action suit was filed against Silvergate, successful an effort to clasp it accountable for its alleged roles successful the nonaccomplishment of FTX lawsuit funds. The suit alleged that the slope is liable for its engagement successful "furthering FTX's concern fraud."