On Thursday, shares of Silvergate Capital have been hit hard and are currently on a steady decline of nearly 40%. This comes after the crypto-focused bank revealed its preliminary results for the final quarter which showed a large number of crypto withdrawals. The total deposits made by clients of digital assets fell to nearly $3.8 billion by the end of the fourth quarter in 2022, representing a fall of almost 68% from the last quarter's closing figure of $11.9 billion.
The withdrawals took place at the same time the cryptocurrency exchange FTX, one of Silvergate's clients, shut down in the midst of a crisis, which raised concerns regarding the reliability of the digital asset business. According to Silvergate, there is currently a "crisis of confidence across the ecosystem."
Silvergate's CEO Alan Lane was quoted as saying:
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,
"At the end of December, $150 million of the bank’s deposits were held by customers who had filed for bankruptcy protection", Silvergate stated in its official announcement on Thursday.
This is a developing story and is being frequently updated.