• Silvergate Capital reported a net loss of $949 million in Q4 of 2022.
• The firm received a class action lawsuit on Dec.16, 2022 due to market impediments.
• Silvergate had $117 billion in transactions in Q4 of 2022, indicating a 4% increase from the third quarter.
Silvergate Capital, a global leader in virtual asset banking, recently reported its Q4 results, leading to a yearly loss of $949 million. This is a huge decline compared to 2021 when it created a $75.5 million profit. The news was made public on the U.S. SEC webpage and has caused concern among investors.
The primary reason for the loss is attributed to a change of risk-off on all virtual asset trading, resulting in deposit outflows. This has caused Silvergate to seek alternate means of maintaining liquidity, such as selling debt securities and raising funds. Despite the losses, the Chief Officer of Silvergate is still confident in the company and has expressed his commitment to providing value-added services for their clients.
In terms of transactions, Silvergate had $117 billion in the fourth quarter, representing a 4% increase from the third quarter ($112.6 billion). This is, however, a 47% decrease compared to the fourth quarter of 2021 ($219 billion).
The company is currently devising a plan to sustain a highly liquid balance sheet with a fortified capital position. They are also actively working on improving the customer experience and expanding their services, so as to ensure that it remains a leading provider of virtual asset banking services.
Though the news of the losses is concerning, Silvergate is confident that it will be able to turn its fortunes around and remain a top player in the virtual asset banking space.