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Silvergate Capital, the parent company of crypto bank Silvergate, has announced that it will suspend its Series A preferred stock dividend. This is in hopes of a major loss and a restructuring following FUD surrounding exposure to several crypto entities that are now defunct.
the company said January 27 It did so to maintain balance sheet liquidity while navigating a string of exposures to some of crypto’s most toxic entities, including FTX and Genesis.
Silvergate Capital CEO Alan Lane said in a statement:
In response to the rapid changes in the digital asset industry in the fourth quarter, we took corresponding measures to maintain cash liquidity to meet potential deposit outflows. deposit.
Silvergate Capital Corp. is traded on the New York Stock Exchange under the ticker SI. Founded in a small town in California in 1988, Silvergate Bank was chosen by many now defunct cryptocurrency companies, including FTX, which had an estimated $1.2 billion worth of deposits in the bank at the time of its failure. became famous as a bank that November last year. Genesis, a digital asset prime broker founded by Digital Currency Group CEO Barry Silbert, also reportedly had assets totaling $2.5 million in the bank.
Further complicating the matter is the Bank run with $8.1 billion worth of deposits withdrawn Earlier this month it was down about 68%, forcing Silvergate to liquidate assets and lay off 40% of its staff. At the time, the company said it was experiencing a “crisis of trust across the ecosystem.”
Silvergate will have more than $150 million in assets from clients who have filed for bankruptcy protection by the end of 2022, the statement said.
After going public in 2019, Silvergate’s share price rose to a high of $222 in November 2021, the same month Bitcoin peaked above $65,000. Since then, Silvergate Capital’s stock has fallen to $12.68, more than 90% below its all-time high.
