Sell ​​bonds at low prices to save your life! Silvergate’s “$8.1 billion run” stock price plummeted 46%

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Affected by the collapse of the cryptocurrency exchange FTX, a run on the cryptocurrency bank Silvergate broke out, forcing the bank to incur huge losses and sell assets at low prices to meet the withdrawal demand of approximately US$8.1 billion.

Silvergate said in a document submitted to the US Securities Regulatory Commission (SEC) that deposits related to cryptocurrencies fell sharply by 68% in the fourth quarter, with capital outflows as high as $8.1 billion, and customer deposits fell from $11.9 billion in the third quarter. to $3.8 billion in the fourth quarter.

In order to meet a large number of withdrawals, Silvergate sold bonds on its balance sheet for US$5.2 billion, resulting in a loss of US$718 million, far exceeding the bank’s total profits since 2013.

At the same time, Silvergate also revealed that the company has laid off 40% of its staff, or about 200 employees, and said it will reduce its business scale, shelve its plan to issue its own digital currency, and write off the Diem technology and technology used to acquire the Meta cryptocurrency project. Assets of $196 million.

After the news came out, Silvergate shares fell 46% to $11.76, below the issue price of $12.

Blockbuster reported earlier that one of Silvergate’s customers is FTX, which assists its exchange in handling fiat currency exchange and deposits. Some users who use FTX’s OTC trading service revealed that when remitting money to FTX, they are actually remitting money to Alameda, while SBF It has been emphasized that FTX and Alameda are two independent companies, so in theory, Silvergate should not allow Alameda to “collect” FTX’s money, which may have violated the money laundering prevention law.

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