Crypto Bank Silvergate Lays Off 40% of its Staff

Paigambar Mohan Raj
Source: Coincu News

The crypto winter continues to affect firms as we move into 2023. According to reports, Silvergate Capital has laid off around 40% of its workforce. As per an official filing from Thursday, the Crypto-Centric bank has let go of 200 employees. The bank also scrapped its ambitions to introduce a digital currency and wrote off the $196 million spent purchasing Diem Association’s technology and assets from Meta.

The bank also announced select unaudited and preliminary financial metrics for the three months that ended on December 31, 2022.

The market for digital assets and crypto has experienced numerous high-profile bankruptcies. This is partly due to the industry’s severe over-leveraging. Due to these factors, the sector is experiencing a lack of trust, and many market players have turned to a “risk off” stance on digital asset trading firms.

Alan Lane, CEO of Silvergate, stated,

“In response to the rapid changes in the digital asset industry during the fourth quarter, we took commensurate steps to ensure that we were maintaining cash liquidity in order to satisfy potential deposit outflows, and we currently maintain a cash position in excess of our digital asset related deposits.”

The crypto bank is making several efforts to make sure the company is robust. These actions involve adjusting its expenditure base, including future assessments of its product line and clientele. The recent layoffs are also part of its plan to remain above water.

Regardless of the current situation, the bank stated that its mission has not changed.

Is it the end for the crypto bank?

Silvergate still has faith in the future of the digital asset market and is committed to giving its key institutional clients value-added services. The business is dedicated to keeping its balance sheet extremely liquid and its capital position solid.

The crypto markets are still suffering from the harsh winter, which has followed investors into the new year. The US Federal Reserve, on the other hand, will likely not cut interest rates anytime soon. Experts predict that the overall finance industry will not recover until 2024.

At press time, the global crypto market cap stood at $853 billion, down by 0.1% in the last 24 hours.