Silvergate Capital, a leading global virtual asset bank, announced its Q4 results, leading to a yearly loss of $949 million. This is a bad sign for the firm compared to 2021 when it created a $75.5 million profit.
Silvergate provides Q4 2022 results
According to a report on the U.S. SEC webpage, the organization (Silvergate) faced a net loss of nearly $1 billion at the end of Q4. The firm received a class action lawsuit on Dec.16, 2022.
Amid the crypto market impediments that led to various partakers initiating a change of risk-off on all virtual asset trading, Silvergate said that it witnessed deposit outflows, so it had to seek means of liquidity maintenance.
Therefore, the firm maintained its balance sheet by selling debt securities and raising funds.
Silvergate stated that almost $1 billion was lost in Q4 of 2022. It is undoubtedly worse than the $40.6 million gain in Q3 of 2022 and Q4 of 2021.
The firm had 1,620 customers as of Dec.31, 2022.
$117 billion in transactions in Q4
In terms of transfers, the digital asset bank made $117 billion in the fourth quarter, indicating a 4% increase from the third quarter ($112.6 billion). It is also a 47% decrease compared to the fourth quarter of 2021 ($219 billion).
The Chief Officer of Silvergate mentioned that he still believed in the company as they are adjusting to losses in the virtual currency world. He added that they decided to remain focused on providing value-added services for their clients.
Silvergate will execute a plan to sustain a highly liquid balance sheet with a fortified capital position.
The cryptocurrency-based bank stated that it had to cut off some of its employees and product portfolio evaluation and management of its expenditure to cater to and tackle the low deposit level situation.
The firm has reduced its staff as a result of the losses.