The U.S based crypto bank’s share price dwindled from all-time high of $200 to just $8 per share.
After selling assets worth billions of dollars, Silvergate Capital is back in the news for all the wrong reasons. In a regulatory filing on March 1, Silvergate released a statement expressing concerns that it could soon become “less than well-capitalized”.
In an effort to save itself from the crypto bear market, the company laid off 200 employees, roughly 40% of its workforce in January this year.
The company just hit rock bottom after it admitted that the U.S. Department of Justice (DOJ) would investigate it over its involvement in the crash of FTX exchange.
The company had set up an instant payment network for its clients dealing purely in cryptocurrencies. Although the company isn’t directly exposed to highly volatile crypto assets, the bear market has affected a large number of clients.
FTX was one of its biggest clients before it filed for bankruptcy back in November 2022. Soon after, the authorities issued a letter to Silvergate, probing its knowledge of FTX’s business practices.
The year 2023 has already witnessed the fall of Genesis, the leading lending protocol and may further see several other crypto platforms filing for Chapter 11 bankruptcy like last year.
JP Morgan has downgraded the stock from “neutral” to “underweight” and Coinbase will be dropping Silvergate as a banking partner.
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Paras is a blockchain writer & video creator at Katoch Tubes. In his free time, he loves watching space exploration documentaries & Hollywood movies.