Silvergate Bank, a state-chartered bank specializing in providing financial infrastructure to the crypto industry, filed a WARN Act on job cuts that reduced its workforce by 40%, The San Diego Union Tribune reports. To reset its business after a massive run on deposits last quarter, crypto-bank Silvergate has slashed 181 jobs at its local headquarters. The bank was most recently in the spotlight during the collapse of the crypto exchange FTX, for which it handled extensive FIAT transactions.
The layoffs span the organization, from underwriting to client services, business development to loan administration, information technology, and human resources. About two dozen of the jobs eliminated were senior-level. According to the WARN filing, the chief credit officer and chief anti-money laundering and sanctions officer also were let go.
Throughout 2022, we increased employee headcount at a rapid rate in an effort to keep up with our growing business and serve our customers effectively. It has since become clear that we need to manage expenses to account for the economic realities facing our business and the industry today.Chief Executive Alan Lane
Silvergate received $4.3 billion from the San Francisco-based Federal Home Loan Bank last year, following the collapse of crypto exchange FTX, according to the firm’s Q4, 2022 flings.
Silvergate’s CEO, Alan Lane, reported that the firm had less than 10% exposure to FTX as of September 30, 2022. Moreover, according to reports, BlockFi deposits accounted for less than $20 million of the bank’s total deposits. However, Silvergate users withdrew $8.1 billion worth of digital assets by December 2022. Due to this, Silvergate deposits fell by $4.1 billion to $3.8 billion at the end of December from $11.9 billion in Q3 2022.
The company had to sell its securities and derivatives for a loss of $718 million during the fourth quarter.