"After Kriss FTX, many people were affected, I wonder when this calamity will end."
Shares of cryptocurrency-focused Bank Silvergate Capital faced a 50% plunge on reports of large withdrawals of digital assets.
This follows as total deposits by customers in the fourth quarter of 2022 recorded a fall of around 68% at $3.8 billion compared to previously at $11.9 billion.
As a result, the bank terminated around 200 employees and left the mortgage warehouse lending sector*.
*A short-term financing arrangement extended by a financial institution to a mortgage originator to provide funds for the closing of its loan
In fact, Silvergate's plan to launch a blockchain-based payment solution may not be feasible yet due to the obstacles it is currently facing.
The following incident reportedly happened when Silvergate's client, the crypto exchange company FTX, suffered an overnight collapse and caused investors to lose faith in digital assets.
However, Silvergate will take various new measures to maintain their cash liquidity, said Silvergate's Chief Executive Officer (CEO), Alan Lane.
He added that one of his clients who filed for bankruptcy was found to be holding $150 million from the bank's deposits at the end of last December.
For the record, Silvergate shares in the United States (US) stock market saw a 50% decline shortly after climbing 27% on Wednesday.
