Silvergate Capital, the parent company of now-defunct crypto-friendly bank Silvergate Bank, has announced another major layoff that will affect 230 employees.
recently Admission Along with the Securities and Exchange Commission (SEC), the company said it would have just 80 employees left by the end of the week to manage the liquidation of its crypto-friendly bank.
“Additional incremental reductions in headcount are expected to occur on or after June 30, 2023, August 30, 2023 and November 30, 2023,” the filing said.
The La Jolla, California-based company elaborated that the remaining employees “will focus on implementing the bank liquidation, preserving the residual value of the company’s assets, and addressing pending regulatory and other inquiries and investigations with respect to the company and the bank.” ” ,
Silvergate said it is still unable to meet its filing obligations, claiming it does not expect to prepare audited financial statements in an effort to reduce costs.
In addition, the company said that it has sold all its debt securities, which are in excess of the amount required to repay depositors.
Silvergate was one of the lenders most affected by the fall of FTX last November.
As mentioned, Silvergate faced a bank run Following the collapse of FTX and had to sell $5.2 billion of debt securities held on its balance sheet to cover approximately $8.1 billion in user withdrawals.
As a result, it incurred a loss of $718 million, which reportedly exceeded the bank’s total profits since 2013.
The bank had only $3.8 billion in deposits at the end of 2022, compared to $11.9 billion in 2021.
Notably, the new wave of layoffs comes as the company let go of another 200 employees earlier this year to navigate a “challenging macro environment.”
Crypto firms struggle to find banking partners as crypto-friendly banks fail
Crypto companies have been struggling to find new banking partners following the recent banking crisis, which saw the collapse of some of the more crypto-friendly banks.
In early March, Silvergate Capital Corporation, the parent company of Silvergate Bank, announced That it has decided to wind up the bank’s operations and liquidate its subsidiary.
Just two days after the Silvergate collapse, SVB Financial Group, one of Silicon Valley’s most popular lenders to tech and growth startups, fail After running into the bank.
At the same time, Signature Bank, another crypto-friendly bank, was shut down by US regulators over fears of systemic contagion.
Following the closure of these three biggest crypto-friendly banks, crypto firms have been left scrambling to find banking partners.
“Regulators do not like crypto and even the word decentralization bothers them, however, they are not fools – they will know that no amount of being opaque legal and strong will make crypto go away, ” Said Vadim Yermak, CEO of blockchain marketing firm PRMR.
“The short-term goal is to keep crypto out of traditional banks so that the idea of crypto doesn’t become normal.”