JVTech News FTX: two months after the collapse, the crypto platform has an unexpected collateral victim
Almost two months after the collapse of FTX, the second largest cryptocurrency platform, the consequences are still being felt… Even a company outside the cryptocurrency sector found itself caught in the fall of this giant.
When an American bank finds itself paying for the broken vessels of the FTX crypto platform
After the FTX crypto platform fiasco, many of its related crypto companies found themselves in a delicate situation. However, these scenarios were usually isolated in the cryptocurrency industry.
Today, the defunct platform continues to exact a heavy toll for unexpected new victims. In fact, FTX also impacts traditional institutions like banks.
Almost two months after the unfortunate event, it is the turn of the Californian bank Silvergate to be in turmoil. The publicly traded bank specializes in cryptocurrencies and has played a major role in the affairs of Sam Bankman-Fried, founder of FTX.
Thus, according to the BBC, customers of the US bank Silvergate have withdrawn more than 7.5 billion euros from their accounts since the failure of the cryptocurrency exchange. Double trouble, the bank saw nearly two-thirds of its customers close their accounts permanently in the last quarter.
The company’s results released on Thursday shed light on a critical situation and sent the stock price tumbling nearly 43%. In three months, Silvergate’s shares are down 84%.
Silvergate Bank in big trouble
As a result, the latter is in a delicate situation and has had to resort to drastic measures to recover its losses. To recover liquidity, the bank sold assets for almost 4.8 billion euros. In addition, the bank plans to lay off 200 employees, or 40% of its workforce. The reason given refers to the “economic realities” facing the cryptocurrency industry.
“The past few weeks have been very challenging for the digital asset industry as we all grappled with the apparent misuse of client assets and other misjudgments by FTX and Alameda Research. says Alan Lane, Chairman and CEO of Silvergate Capital Corporation
While FTX’s implosion occurred last November, its impact continues to be felt by the unsuspecting gamers. This case testifies to the sprawling influence of FTX, a platform that has become a giant in just a few years. Furthermore, the bank is already the subject of a thorough investigation by US authorities in order to determine the nature of its dealings with the crypto exchange FTX.
This historical situation reminds us that the cryptocurrency sector is still young and remains ultra-volatile. For many companies, the rise has been meteoric, but some are currently facing a brutal backlash. Especially since most of its companies have woven various deals and partnerships during the cryptocurrency bubble. Thus, in the midst of the crypto winter, the situations of professionals specialized in the sector are extremely correlated to the prices of cryptocurrencies but also to the health of some competitors or partners.