​Silvergate crypto bank announces cuts and suspends cryptocurrency launch

What’s new? US cryptocurrency bank Silvergate has announced a 40% staff reduction, with a total of about 200 employees leaving the organization. In addition, the bank suspended its plans to launch a digital currency and wrote off $196 million related to the purchase of Diem Association technologies and assets from Meta in January 2022. CoinDesk reports, citing the company’s report with the US Securities and Exchange Commission (SEC).

Documentation on the SEC’s website

What else is known? Silvergate stresses that the digital asset industry has transformed Q4 2022, with significant leverage leading to several high-profile bankruptcies. In response to the recent industry turmoil and the corresponding impact on the bank’s balance sheet, Silvergate is taking a number of steps to ensure the sustainability of its business, including recalibrating its cost base.

Earlier, as the WSJ reported, Silvergate’s cryptocurrency-related deposits fell by 68% to $3,8 billion in the fourth quarter. The bank’s losses totaled $718 million.

News on the WSJ website

As part of the audit, the company announced staff reductions to meet the economic realities facing the digital asset industry today. The cuts will allow the bank to continue to offer a personalized customer experience and manage costs wisely in a more complex macro environment.

The company estimates the total cost associated with the layoffs at about $8 million, including about $6,1 million in severance payments and $1,3 million in employee benefits. Most of those costs will be in the first quarter of 2023.

In addition, Silvergate reported that it will conduct a $196 million write-down related to its purchase of Diem Association technologies and assets, and the launch of its blockchain-based payment solution will be delayed.

On November 30, US crypto exchange Kraken laid off 1100 employees to adapt to the new market conditions. On December 4, Bybit exchange CEO Ben Zhou announced staff reductions as part of an ongoing business reorganization, and on December 26, Louis Liu, founder of Octopus Network, announced a 40% staff reduction and a 20% pay cut. In addition, in December, analyst Colin Wu reported mass layoffs on the Huobi exchange.

For how to find a job during layoffs at crypto companies, read GetBlock Magazine’s special feature.