Silvergate Capital Corp reported a sharp drop in fourth-quarter crypto-related deposits on Thursday and said it would cut its workforce by 40%, or about 200 employees, as withdrawals surged following the collapse of industry major FTX.
Representations of cryptocurrencies Bitcoin, Ethereum and DogeCoin are placed on PC motherboard in this illustration taken, June 29, 2021. REUTERS/Dado Ruvic/Illustration/File Photoreported a sharp drop in fourth-quarter crypto-related deposits on Thursday and said it would cut its workforce by 40%, or about 200 employees, as withdrawals surged following the collapse of industry major FTX.
Total deposits from digital asset customers declined to $3.8 billion at the end of December 2022, compared with $11.9 billion at Sept. 30, 2022, the crypto-focused bank said in a preliminary earnings report. More than a trillion dollars in value was wiped out from the crypto sector last year with rising interest rates exacerbating worries of an economic downturn. The crash has eliminated key industry players such as crypto hedge fund Three Arrows Capital and crypto lender Celsius.
The biggest blow to the sector came after major crypto exchange FTX filed for bankruptcy protection in November. Its swift fall has sparked tough regulatory scrutiny of how crypto firms hold funds and conduct business operations.
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