Silvergate collapses after crypto meltdown triggered deposit run

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  • Silvergate had deposits for FTX units and Alameda Research
  • Silvergate seems to be most at risk from what happened to FTX
  • Stocks plummeted more than 40%

Shares of crypto bank Silvergate Capital Corp. have plummeted. The company says the collapse of the crypto industry triggered a run on deposits, forcing it to lay off 40% of its staff and sell assets at a large loss.

Silvergate had deposits for FTX units and Alameda Research, the company behind the collapse of the crypto exchange. Su Keenan reports on Bloomberg Television.

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The collapse of the FTX continues to have consequences

The Silvergate bank is reeling. It seems to be most at risk because of what happened to FTX. They took a big gamble on crypto, but the collapse of the FTX sent it into crisis. It’s down 42% in the last session. It held funds and assets for many of these crypto entities, Bloomberg TV reported.

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Stocks plummeted more than 40%

Shares plummeted more than 40% after customers withdrew the equivalent of $1.1 billion from these digital asset deposits in the fourth quarter. That forced Silvergate to lay off assets and lay off 40% of its staff, sending the bank into another crisis.

Supervisors also keep an eye on the bank

Lawmakers are scrutinizing the bank itself for its connection to FTX and some of its deposits. Meanwhile, crypto broker Genesis has laid off 30% of its staff and the former CEO of bankrupt cryptocurrency lender Celsius is being sued by the New York Attorney General for defrauding investors.

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All this news tarnishes the space even further, spreading gloom throughout the industry.