Silvergate Capital Lays Off 40% Of Staff As FTX-Induced Contagion Strikes Again

Illustration of broken graph arrow spilling coins.

Silvergate Capital reported investors pulled out more than $8 billion in deposits from the crypto-focused bank as FTX’s sudden and spectacular collapse left investors reeling.

The bank also announced it will cut 40% of its workforce — about 200 employees — “in order to account for the economic realities facing the business and industry today,” the company said in a release

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Total deposits from digital asset customers at the bank declined to $3.8 billion at the end of December — from $11.9 billion at the end of September. 

The bank sold debt securities to keep up with withdrawals at a significant loss. The bank sold $5.2 billion of such securities at a loss of $718 million for its fourth quarter ending in December.

The news sent the bank’s stock into a spiral down, nearly 50% at one point Thursday.

FTX’s influence

Silvergate is just the latest to be affected by FTX’s implosion. Others such as crypto lenders Genesis, Voyager and  BlockFi all have been affected in one way or another.

FTX, the fourth-largest exchange by volume at one point, touched nearly everything in the crypto industry. Its implosion darkened what was already a crypto winter and has shook people’s confidence in digital assets.

Just two days ago, disgraced FTX founder Sam Bankman-Fried pled not guilty in a New York federal court to eight criminal counts involving FTX’s and Alameda Research’s collapse.

Bankman-Fried also faces lawsuits from the SEC and the Commodity Futures Trading Commission.

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