American bank Silvergate Capital (SI) says that customers withdrew $8 billion U.S. worth of cryptocurrency deposits in the final three months of 2022.
In all, nearly two-thirds (67%) of the bank's customers pulled their cryptocurrency deposits, forcing it to sell $5.2 billion U.S. of assets to cover costs and remain liquid.
The withdrawals followed the collapse of the FTX cryptocurrency exchange, which had been valued at $32 billion U.S. before its bankruptcy filing on November 11, 2022.
The FTX collapse has shaken confidence in the entire cryptocurrency industry, sparking multiple bankruptcy filings at other firms and declines in cryptocurrency prices.
Silvergate Capital, which bills itself as a “crypto bank,” acts as a bank for cryptocurrency companies that have difficulty accessing banking services from traditional sources.
Silvergate was a small U.S. bank based in California before it switched to focus on cryptocurrencies and went public in November 2019. At the market's peak in November 2021, its shares had grown by more than 1,500%.
In a new filing with the U.S. Securities and Exchange Commission (SEC), Silvergate Capital said it had sold debt to cover the recent crypto withdrawals. The bank has also reduced its workforce by 40% in recent weeks.
Silvergate Capital’s stock has declined 90% over the last 12 months to $12.24 U.S. per share.
