Silvergate Capital (SI), a cryptocurrency bank, has announced losing USD 1 billion net during Q4 of 2022.
The company’s net income was USD 40.6 million for Q3 of 2022; in 2021, its net income for the third quarter was USD 18 million. For the entire period of 2022, the cryptocurrency bank reported a loss of USD 949 million as compared with the company’s net income of USD 75.5 million one year earlier.
The results of the crypto bank’s performance during the last quarter of 2022 were hinted at in January 2023, when Silvergate declared that it has outflows of USD 8.1 billion in customer deposits of virtual assets in Q4 and that it gave notice to approximately 40 per cent of the staff. The company has expectations of incurring charges for restructuring in a total amount of USD 8.1 million for slashing the staff. The majority of the sum will be recognized by Silvergat in Q1 of 2023.
Moreover, the crypto bank reported a USD 134.5 million charge for impairment tied to securities worth USD 1.7 billion. The company’s expectations are to sell the securities in an effort to fight the increasing number of outflows experienced at the end of 2022.
Starting with the downfall of the FTX cryptocurrency exchange in November 2022, Silvergate is one of the many crypto companies affected by the news. The bank is public on NYSE (New York Stock Exchange), where its shares increased 4.9 per cent to USD 13.85 in premarket trading. Bitcoin, on the other hand, experienced an increase of 1.7 per cent to USD 21,235. Over 2022, the crypto bank’s stock lost close to 90 per cent of its value.