Crypto Bank Silvergate Reports A $1 Billion Net Loss For Q4 2022
Key Points:
- In the fourth quarter of 2022, Silvergate Bank will have a net loss of $1 billion that is attributable to common shareholders.
- Customers deposited an average of $7.3 billion in digital assets.
- The anticipated $1.7 billion in securities that the business plans to sell in the first quarter of 2023 to lower borrowings resulted in a loss on securities of $751 million and an impairment charge of $135 million, respectively.
A $1 billion net loss attributable to common shareholders was reported by cryptocurrency bank Silvergate during the fourth quarter of 2022.
The digital asset bank noted in a US Securities and Exchange Commission (SEC) report that it had significant deposit outflows in the fourth quarter of 2022 and took steps to maintain cash liquidity, including selling debt securities and securing wholesale funding.
For the quarter, Silvergate reported a net loss of $1.05 billion as opposed to a profit of $18.4 million at the same time last year. The anticipated $1.7 billion in securities that the business plans to sell in the first quarter of 2023 to lower borrowings resulted in a loss on securities of $751 million and an impairment charge of $135 million, respectively.
The report states that in the fourth quarter of 2022, customers deposited an average of $7.3 billion in digital assets. Deposits were approximately $12 billion in the third quarter of 2022, which is a big decrease from this.
The business reported a $949 million loss for the entire year of 2022 as opposed to a net income of $75.5 million in 2021.
The company’s announcement that it had eliminated 40% of its workforce and seen an $8.1 billion outflow of customer deposits of digital assets at the beginning of January predicted the bank’s performance for the most recent quarter. It anticipates $8.1 million in restructuring costs related to the layoffs, the majority of which will be recognized this quarter.
The fallout from the failure of cryptocurrency companies last year, which peaked in November with the closure of cryptocurrency exchange FTX, shook Silvergate.
The corporation stated that despite the losses, it is taking steps to get ready for a prolonged period of fewer deposits. The notice states that Silvergate is controlling its cost structure, assessing its product line, and reviewing its clientele.
“The digital asset industry experienced a transformational shift, with significant over-leverage in the industry-leading to several high-profile bankruptcies. These dynamics created a crisis of confidence across the ecosystem and led many industry participants to shift to a ‘risk off’ position across digital asset trading platforms.”
Despite the difficulties, Alan Lane, the CEO of Silvergate, emphasized that the company still has faith in the digital asset sector and is dedicated to keeping a highly liquid balance sheet and a strong capital position.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Harold
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Crypto Bank Silvergate Reports A $1 Billion Net Loss For Q4 2022
Key Points:
- In the fourth quarter of 2022, Silvergate Bank will have a net loss of $1 billion that is attributable to common shareholders.
- Customers deposited an average of $7.3 billion in digital assets.
- The anticipated $1.7 billion in securities that the business plans to sell in the first quarter of 2023 to lower borrowings resulted in a loss on securities of $751 million and an impairment charge of $135 million, respectively.
A $1 billion net loss attributable to common shareholders was reported by cryptocurrency bank Silvergate during the fourth quarter of 2022.
The digital asset bank noted in a US Securities and Exchange Commission (SEC) report that it had significant deposit outflows in the fourth quarter of 2022 and took steps to maintain cash liquidity, including selling debt securities and securing wholesale funding.
For the quarter, Silvergate reported a net loss of $1.05 billion as opposed to a profit of $18.4 million at the same time last year. The anticipated $1.7 billion in securities that the business plans to sell in the first quarter of 2023 to lower borrowings resulted in a loss on securities of $751 million and an impairment charge of $135 million, respectively.
The report states that in the fourth quarter of 2022, customers deposited an average of $7.3 billion in digital assets. Deposits were approximately $12 billion in the third quarter of 2022, which is a big decrease from this.
The business reported a $949 million loss for the entire year of 2022 as opposed to a net income of $75.5 million in 2021.
The company’s announcement that it had eliminated 40% of its workforce and seen an $8.1 billion outflow of customer deposits of digital assets at the beginning of January predicted the bank’s performance for the most recent quarter. It anticipates $8.1 million in restructuring costs related to the layoffs, the majority of which will be recognized this quarter.
The fallout from the failure of cryptocurrency companies last year, which peaked in November with the closure of cryptocurrency exchange FTX, shook Silvergate.
The corporation stated that despite the losses, it is taking steps to get ready for a prolonged period of fewer deposits. The notice states that Silvergate is controlling its cost structure, assessing its product line, and reviewing its clientele.
“The digital asset industry experienced a transformational shift, with significant over-leverage in the industry-leading to several high-profile bankruptcies. These dynamics created a crisis of confidence across the ecosystem and led many industry participants to shift to a ‘risk off’ position across digital asset trading platforms.”
Despite the difficulties, Alan Lane, the CEO of Silvergate, emphasized that the company still has faith in the digital asset sector and is dedicated to keeping a highly liquid balance sheet and a strong capital position.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Harold
Coincu News
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