Famous crypto bank Silvergate experienced a downturn in its stock plunging by 31% following news of its postponement of the annual report on the financial health of the company.
According to the Silvergate report on March 1, the company stated that it would delay filing its 10-K report in a bid to put things in order.
It is noteworthy that a 10-K report is a document containing an overview of a company’s business and financial condition within a year. It is generally required by the United States Securities and Exchange Commission (SEC) annually.
Meanwhile, Silvergate demanded for an additional two weeks in order to provide a comprehensive report for the 2022 fiscal year. It appears that the decision has generated Fear of Doubts and Uncertainty (FUD) as its stock nosedived.
The crypto bank hinted in its late filing notice that it sold more debt securities in January and February as it is expected to record further losses in the subsequent months due to the volatile market conditions.
It maintains that the losses will undoubtedly affect the regulatory capital ratios of the Company as well as the company’s major subsidiary Silvergate Bank, which is capable of making the bank less than well-capitalized.
As a consequence, Silvergate reveals that:
“The Company is currently in the process of reevaluating its businesses and strategies in light of the business and regulatory challenges it currently faces.”
In light of the foregoing, Venture capitalist Adam Cochran remarked that Silvergate’s death or collapse will have negative effects on the crypto space.
Silvergate’s Mission in the Crypto World
Following the emergence of the crypto bank Silvergate in 2019, the firm has been committed to offering loans secured by digital assets to institutional clients.
While there was a decline in its total deposit in the second quarter of 2022 from $14.7 billion to $13.3 billion, there is no mincing word that the deposit has remained steady as it continues to maintain functionality.
At the moment, it is glaring that the crypto bank is not immune to the substantial market volatility recorded in Q4, several high-profile bankruptcies such as the FTX collapse, among others. It is hoped that it will overcome the storm.
