The crypto-focused bank Silvergate warned it would miss the annual financial report deadline and raised questions about its ability to survive. A wave of uncertainty caused about 5% Bitcoin decline
In the SEC filing dated March 1, Silvergate bank said it would not be able to file its annual report by an already extended deadline of 16 March. Moreover, the institution affected by the FTX collapse warned the losses could exceed the previously estimated amount of $1 billion.
Considering the situation, the company was “evaluating the impact that these subsequent events have on its ability to continue” operations, as additional losses would result in Silvergate “being less than well-capitalised”.
Not only did the bank’s shares fall by as much as 40% in after-hours trading, but also the news immediately affected the crypto market.
Thus, the price of Bitcoin fell over 5% from $23,500 to $22,240 in just over 60 minutes on March 3. The last time BTC was priced at $22,250 was Feb. 15. The decline wiped $22 billion off Bitcoin’s total market cap, which now stands at $431.5 billion.
Other major cryptocurrencies have also suffered a sharp fall. For instance, Ether has fallen 4.74% from $1,644 to $1,566, erasing $9 billion from its market cap over the first trading hour.
Silvergate has drawn the regulators’ attention amid the ongoing FTX collapse investigation. US senators alleged that Silvergate might have facilitated the improper transfer of FTX customer funds to Alameda. The Anti-Fraud Department of the US Department of Justice has launched a criminal investigation into the placement of accounts in Silvergate related to the bankrupt institutions.
As uncertainty was hanging over the institution, about 65% of Silvergate’s customers withdrew their deposits in the last three months of 2022. Besides, the crypto-focused bank sold its assets worth $5.2 billion to cover expenses and remain liquid.