Silvergate Capital, the parent company of the collapsed Silvergate Bank, has been dealt another blow. The company recently disclosed that it will be delisted from the New York Stock Exchange (NYSE), and 230 staff members will be let go. The NYSE has already suspended trading in the company’s stock, with delisting to commence “shortly”.
In a May 11 filing to the United States Securities and Exchange Commission (SEC), Silvergate Capital revealed that 230 staff members will be “separated” starting May 12. The staff cut will leave behind approximately 80 officers and employees to continue Silvergate Bank’s liquidation process.
However, this is not the end of the staff cuts for Silvergate Capital. The company has already slated at least three more headcount cuts for June 30, Aug. 30, and Nov. 30 “or later”. The cost of these staff drawdowns is estimated to be around $13.6 million, including expenses on severance, retention, bonus pays, and job placement programs.
In a separate SEC filing on the same day, Silvergate Capital stated that it’s unable to file legally required financial reports for the 2022 fiscal year and the first quarter of 2023. The company also “does not expect to be able” to file any similar reports in the future. Silvergate cited “challenges” due to “continuous developments relating to the regulatory and other inquiries and investigations that are pending,” and liabilities from legal action and the bank’s liquidation process.
As a result of the ongoing challenges, Silvergate Capital has determined that it’s in the “best interests” of stakeholders to “minimize costs and expenses” to preserve value. This means that some of the staff to be cut include those that are “critical” in preparing the legally required financial reports.
The collapse of Silvergate Bank has already had significant consequences. On March 8, Silvergate Capital announced that it would voluntarily liquidate Silvergate Bank. Days earlier, a line-up of crypto firms, including Gemini, Coinbase, Galaxy Digital, and BitStamp, severed ties with the bank as it faced a Justice Department investigation over alleged ties to the collapse of FTX.
Silvergate Capital’s recent disclosure of staff cuts and the company’s delisting from the NYSE is further indication of the fallout from the collapse of Silvergate Bank. The ongoing regulatory and legal challenges have made it difficult for the company to continue operating, and more staff cuts are on the horizon.
