After hours, the stock price of Silvergate Bank fell by more than 30% as a result of the bank’s announcement of a delay in releasing its annual 10-K report. This new revelation adds to the long list of incidents that have shaken the cryptocurrency market in 2022 and beyond.
The Securities and Exchange Commission (SEC) mandates a 10-K report, which provides a thorough review of a company’s financial situation and commercial operations. The cryptocurrency bank announced that it would require an extra two weeks to finish the report for the fiscal year 2022.
At Wednesday’s closing bell, Silvergate’s stock (SI) was trading at $13.53. But, following the announcement, the price fell as much as 31.7% in after-hours trading, tumbling well below $10.
According to Silvergate, “these additional losses will negatively impact the regulatory capital ratios of the Company and the Company’s wholly owned subsidiary, Silvergate Bank […] and could result in the Company and the Bank being less than well-capitalized.”
In the final quarter of 2022, Silvergate announced a $1 billion net loss and a $14 billion fall in customer deposits, blaming the “planned reduction in digital asset banking deposits” and general turmoil in the market. Following the FTX collapse, the bank’s deposits were shaken, leading it to turn to the Federal Home Loan Bank (FHLB) for a $4.3 billion loan in January.
The bank also added that it is “currently in the process of re-evaluating its businesses and strategies in light of the business and regulatory challenges it currently faces.”
Silvergate also announced that it is now going through additional steps and submitting papers to complete certain audits that its independent certified public accounting firm has requested.
They added, “The Corporation is assessing the impact that these subsequently occurring events have on its ability to continue as a going concern for the twelve months subsequent to the publishing of its financial statements.”
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