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US bank Silvergate sinks to $1bn loss as crypto crisis takes a toll

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Crypto-focused US bank Silvergate swung to a $1bn loss in the last three months of 2022, underscoring how the lender has been rocked by the collapse of crypto prices and implosion of exchange FTX.

The California-based bank reported a $1.05bn net loss for the fourth quarter, compared with a profit of $18.4mn in the same period a year earlier, and said it would slash its product offering and remove non-core customers in an attempt to cut costs.

Silvergate has pivoted from being a small community lender to a crypto-focused bank in recent years and played an important role in providing services to Sam Bankman-Fried’s now-collapsed crypto empire. The earnings reported on Tuesday underline the extent of the pressure facing the bank, amid plunging crypto prices and the bankruptcy of several large companies, including Bankman-Fried’s FTX and Alameda Research.

Silvergate said it fell to a full-year loss of $949mn in 2022, compared with a profit of $76mn in 2021. Analysts were expecting a full-year loss of $758mn, according to FactSet.

Customer deposits plunged by 52 per cent in the last three months of 2022 compared with the third quarter, totalling $6.3bn at the end of the year,…

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