That missed Wall Street forecasts for a loss of $870 million. A year ago, the crypto-friendly bank had a net income of $18 million.
“During the fourth quarter of 2022, the digital asset industry underwent a transformative change, with significant over-leveraging in the industry leading to several high-profile bankruptcies,” Silvergate said in its earnings statement, adding that a crisis of confidence across the crypto ecosystem led investors to offload riskier assets.
FTX’s crash had sparked a bank run on Silvergate in late 2022. Earlier this month, Silvergate announced it was forced to sell loss-making assets to cover $8.1 billion in withdrawals, which it acknowledged on Tuesday.
The $718 million the company lost selling debt far exceeds Silvergate’s total profits over the past decade, according to the Wall Street Journal. And in early January, the bank cut 40% of its staff to “account for the economic realities” at issue.
Silvergate also recorded a $134.5 million charge related to $1.7 billion of securities it expects to sell in the first quarter following mass outflows late last year.
“While we are taking decisive steps to navigate the current environment, our mission has not changed,” Silvergate CEO Alan Lane said Tuesday. “We believe in the digital asset industry and remain focused on providing value-added services for our major institutional clients.”
Meanwhile, the company has come under scrutiny from lawmakers, with US senators led by Elizabeth Warren demanding answers from Lane about business dealings with FTX and Alameda Research.
In response to claims by lawmakers made to CNBC in December, the bank said it was a “victim” in the FTX saga and plans to cooperate with further investigations.
Silvergate shares have plunged 87% since a year ago, but on Tuesday the shares were up 10%.
