According to information provided by Silvergate Capital, the parent company of the failed Silvergate Bank will be eliminated from the New York Stock Exchange, and 230 of its employees will be terminated from their positions.
Staff Layoff and Delisting Securities
Silvergate Capital said that from May 12, 230 members of its personnel would be “separated” in a document that was submitted to the United States Securities and Exchange Commission (SEC) on May 11. Trading in the company’s shares was also halted by the NYSE, and delisting is expected to begin “shortly.”
Following the layoffs, “approximately 80 officers and employees” will remain at Silvergate Bank in order to carry out the remainder of the liquidation procedure.
There will be more reductions in the near future. According to the petition, at least three additional reductions in headcount are scheduled to take place “or later,” on June 30, August 30, and November 30 respectively.
Silvergate anticipated that the expenditures associated with reducing personnel would total around $13.6 million. These costs would include severance, retention, and bonus wages in addition to job placement initiatives.
Minimizing Costs and Expenses for Future
In a second document that was submitted to the SEC on May 11, Silvergate said that it “does not expect to be able” to submit any reports that are comparable in the future since it is unable to publish legally necessary financial reports for the fiscal year 2022 and the first quarter of 2023.
The company cited “challenges” caused by “continuous developments pertaining to the regulatory and other inquiries and investigations that are pending,” as well as obligations resulting from legal action and the process of liquidating the bank.
Silvergate came to the conclusion that “minimizing costs and expenses” is the most effective way to maintain value and is in the “best interests” of all stakeholders. According to the company, some of the employees who will be let go are considered “critical” in the process of drafting these papers.
Silvergate Capital to liquidate Silvergate Bank
The parent business of Silvergate Bank, one of the major cryptocurrency institutions that are well-known in the market, has announced that it plans to “wind down operations” at the bank and ultimately liquidate it.
Silvergate Capital Corporation said in a statement made on March 8 that the decision to cease operations was made “in light of recent industry and regulatory developments.” According to the company, the plan for the disposal of Silvergate Bank included “full return of all deposits”.
After an inquiry was launched into Silvergate’s suspected participation in the failure of FTX, a number of cryptocurrency companies, including Coinbase, Paxos, Gemini, BitStamp, and Galaxy Digital, stated in March that they would sever their links to the bank.
To secure the long-term survival of the firm, Silvergate made the painful but essential choice to delist its shares from the NYSE and cut its personnel. In addition to enabling the business to continue pursuing its purpose of offering cutting-edge financial infrastructure solutions to the digital currency sector, the move is intended to reduce expenses and ensure the company’s survival in the face of difficult economic circumstances.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2023/05/12/silvergate-capital-co-massive-disclosure-in-an-sec-filing/