Silvergate Capital, a major financial institution catering to cryptocurrency clients, has initiated significant downsizing of its team. On Thursday, the company reported that 230 employees would be laid off with the number of remaining staff totaling 80. The firm’s California-based lender, Silvergate Bank, shut down earlier in the year in March. This move was the result of many of their crypto-native clients such as Coinbase, Circle, Paxos, and Gemini discontinuing their relationship with the bank. The 80 employees who will stay on board will focus on preserving the value associated with the company’s remaining assets, responding to regulatory inquiries, and addressing investigations into the bank and its parent company.

This overhaul comes after 200 employees were laid off in January in response to a “challenging macro environment”. Interestingly, the massive downsizing of the firm has been overshadowed by the near simultaneous downfalls of Signature Bank and Silicon Valley Bank (SVB). By the end of last year, Silvergate was valued at 11 billion dollars with approximately 29% decrease compared to the previous year. In comparison, Signature and SVB were valued at 110 billion and 209 billion respectively.

The winding down of Silvergate was further accelerated by the withdrawal of 14 billion dollars from the company following a crash associated with crypto mogul Sam Bankman -Fried’s domain. To make up for the deficit, the firm aggressively contracted debt securities and bank loans from a government sponsored institute. Despite this, Silvergate’s stock continues to slide, mirroring the sparse faith of investors in its ability to remain as a going concern. With these latest lay-offs, Silvergate’s winding-down process move closer to completion.



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