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Friday, February 3, 2023

Silvergate Sold Assets At Loss And Cut Staff To Cover 8.1B in Withdrawls

Silvergate as of now has laid off two hundred members from their workforce which is forty percent of the total number of their workforce.

In order to cover client withdrawals totaling $8.1 bn, Silvergate had to sell off of its holdings at a deficit and reduce employees by 40percentage as a result of the FTX fiasco.

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The bank lost $718 mn by selling debts that it had been keeping on its financial statements in order to keep pace with outflows, according to a story in The Journal of Wall Street. According to reports, the loss exceeds the company’s profits since 2013. Additionally, the firm’s crypto deposits fell by 68percentage in the final quarter of 2017.

Due to this, Silvergate let go of 200 people, or 40% of the whole workforce. Additionally, the bank abandoned plans to introduce its own virtual currency, paying off nearly $200 mil it paid Fb to acquire the software it developed for their Diem project.

Silvergate Laying Off 40% Of Its People:

Despite that, the bank says it is still committed to cryptocurrencies and that it has the resources necessary to manage a transition period. In order to handle the present market environment, the bank emphasized that this is “taking bold action.”

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Congressmen in the US have been investigating the bank due of its connections to FTX as well as Alameda Studies. On December 6, 3 U.S. senators sent a statement to Silvergate requesting information about the bank’s role in client losses brought on by the collapse of the FTX exchanges. As stated in the statement, the company’s involvement in moving FTX customers’ cash to Alameda appears to be a mistake on its part to watch over and report suspicious activity.

 

 

 

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