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    Home » Crypto News » Silvergate Reveals Operational Issues, Shares Plunge Over 30%

    Silvergate Reveals Operational Issues, Shares Plunge Over 30%

    Author: Dimitar Dzhondzhorov

    Last Updated Mar 2, 2023 @ 14:13

    Silvergate’s stocks dipped more than 30% following the company’s inability to submit annual results.

    Silvergate Capital Corporation – a California-based financial institution that focuses on cryptocurrencies – said it won’t be able to submit its annual report scheduled for March 16. It also outlined some of its main problems, hinting it might struggle to continue the normal course of its operations.

    As a response, the firm’s shares dumped by nearly 32% in after-hours trading. 

    More Problems for Silvergate

    The firm said it sold additional debt securities to repay financial obligations and that further losses could make the bank “less than well capitalized.” Silvergate, which reported a $1 billion loss in Q4 2022 prompted by the demise of FTX, is currently evaluating the impact of its recent issues and regulatory challenges and will fail to submit its annual report due in mid-March.

    Matthew Dibb – Chief Investment Officer at cryptocurrency asset manager Astronaut Capital – commented on Silvergate’s problems:

    “From what we gather, most crypto companies have had to already find banking elsewhere, hence we believe the damage is likely already done in terms of implications to the wider crypto market.” 

    Wayne Huang – Co-Founder and CEO of XREX – thinks crypto banking has become increasingly vulnerable due to its interconnection with the digital asset industry. 

    ADVERTISEMENT

    Silvergate’s stocks plummeted more than 30% in after-hours trading shortly after the announcement. The hectic 2022 has had a catastrophic impact on its shares, which are down approximately 90% year-over-year.

    This Year’s Issues

    Silvergate did not have the best start in 2023, dismissing around 40% of its workforce and abandoning several projects. It was also suspected by US Senators Elizabeth Warren, Roger Marshall, and John Kennedy of having inside information about the alleged FTX fraud.

    “Both Congress and the public need and deserve the information necessary to understand Silvergate’s role in FTX’s fraudulent collapse, particularly given the fact that Silvergate turned to the Federal Home Loan Bank as its lender of last resort in 2022,” the politicians stated.

    LedgerX – cryptocurrency derivatives exchange under the umbrella of the bankrupt behemoth FTX – recently cut ties with Silvergate, advising clients to stop using it to receive domestic wire transfers. Instead, it recommended they focus on Signature Bank. 

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    Tags: Bitcoin Bear Market FTX Exchange United States
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    About The Author

    Dimitar Dzhondzhorov
    More posts by this author

    Dimitar got interested in cryptocurrencies back in 2018 amid the prolonged bear market. His biggest passion in the field is Bitcoin and he was fascinated with its journey. With a flair for producing high-quality content, he started covering the cryptocurrency space in late 2018. His hobby is football.

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