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Shares in a crypto bank with links to disgraced ex-billionaire Sam Bankman-Fried crashed after a ‘crisis of confidence’ saw customers scramble to withdraw their funds<br>>California-based Silvergate Capital, which offers services including bitcoin-backed loans, said deposits plunged to £3.2billion at the end of last year, from £10billion on September 30<br>>It came as the rapid fall in the value of crypto-currencies caused markets to panic and high-profile bankruptcies<br>> ‘Crisis of confidence’: Silvergate Capital, which offers services including bitcoin-backed loans, said deposits plunged to £3.2bn at the end of last year, from £10bn on September 3<br>>‘These dynamics have sparked a crisis of confidence across the ecosystem and led many industry participants to shift to a “risk off” position across digital asset trading platforms,’ the bank sai<br>p>As a result of what it dubbed ‘economic realities’, Silvergate plans to slash 200 jobs, 40 per cent of its workfor<br>/p>Boss Alan Lane said the decisions were made to adapt to ‘rapid changes in the digital asset industry during the fourth quarter’ but it had enough cash to cover the remaining deposit<br>The shares plunged 42.4 per cent in trading on Wall Street, 대바엑스 following an 88 per cent drop las<br>ar.Silvergate’s troubles are the latest to hit the industry after the collapse of Bankman-Fried’s crypto exchange FTX in Nove<br>. RELATED ARTICLES Share this article Share HOW THIS IS MONEY CAN HELP The 30-year-old tycoon was arrested in the Bahamas last month before being extradited to the US to face allegations he orchestrated what some have dubbed ‘one of the biggest financial frauds in American h<br>ry’.He faces charges that he stole billions from the exchange’s customers to offset losses at his hedge fund Alameda Research and buy lavish properties and pay out millions in political do<br>ons.Silvergate has been ensnared as a key provider of services to Bankman-Fried’s empire.
Three US senators have written to Lane asking him to clarify its role in accepting deposits for Alameda that Bankman-Fried said were supposed to go<br>FTX. They wrote that Silvergate appeared to be ‘at the centre’ of improper transfers of funds.
The bank said it conducted ‘extensive due d<br>ence.’The bankruptcy of FTX has also sparked concerns that contagion could ripple across the sector and Silvergate’s rapid decline in deposits means it could be the next firm <br>all. During the market turmoil, Silvergate rushed to sell £4.4billion in debt securities to bolster its cash<br>erves.It holds around £3.9billion in cash and £4.7billion of US government debt, part of which it planned to sell in e<br> 2023.It scrapped a mortgage product at the end of last year due to rising interest rates and lower mortgag<br>lumes.Concerns about its financial health also appeared to hit others with shares in exchange Coinbase down 11<br> cent.
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