Crypto-focused bank Silvergate Capital will cut about 200 jobs, or 40% of its total workforce, on Jan. 5 in an SEC (U.S. Securities and Exchange Commission) filing. clarified. The news sent the company's stock price down 46% to around $11.76.
The company also canceled plans to issue a digital currency and spent $196 million to buy Diem Association technology and assets from Meta (formerly Facebook). was written off.
The Diem Association announced in February 2022 that Silvergate would purchase the company's assets and technology.
“In response to the rapid changes in the digital asset industry in the fourth quarter (October-December 2022), we have taken corresponding measures to ensure cash liquidity to meet potential deposit outflows. “Currently, we maintain a cash position above our digital asset-related deposits,” said CEO Alan Lane in a press release.
Despite the challenging macroeconomic environment and the slump in the cryptocurrency market, the Silvergate Exchange Network still saw average daily trading volume of $1.3 billion in Q4, up from $1.2 billion in Q3.
But in the fourth quarter, $8.1 billion in deposits related to digital assets flowed out. Deposits fell to $3.8 billion in the fourth quarter from $11.9 billion in the third quarter.
“The digital asset industry is at a major turning point. Massive over-leveraging has led to the failure of several high-profile companies and created an industry-wide credit crisis. Much of the industry has shifted to risk-off,” Lane said. CEO said.
｜Translation: coindesk JAPAN
｜Editing: Toshihiko Inoue
｜Original: Silvergate Cuts 40% Jobs, Writes Off Diem Asset Acquisition