News JVTech FTX: two months after its collapse, the crypto platform has an unexpected security victim
Almost two months after the collapse of FTX, the second largest cryptocurrency platform, the consequences are still being felt… A company outside the crypto sector has also found itself caught in the fall of this giant.
When a US bank finds itself paying for the broken pots on the FTX crypto platform
After the failure of the FTX crypto platform, many of the crypto companies linked to it found themselves in a difficult situation. However, these scenarios were usually transferred to the crypto sector.
Today, the defunct platform continues to exact a heavy toll on unexpected new victims. In fact, FTX even has implications for traditional businesses such as banks.
Almost two months after the unfortunate event, it is the Californian bank Silvergate’s turn to be in turmoil. The listed bank specialized in cryptocurrencies and played an important role in the business of Sam Bankman-Fried, the founder of FTX.
The customers of the American bank Silvergate have thus withdrawn more than 7.5 billion euros from their accounts since the crypto exchange’s bankruptcy, according to the BBC. Double trouble, the bank has seen nearly two-thirds of its customers permanently close their accounts over the past quarter.
The company’s results published on Thursday shed light on a critical situation and caused the share price to fall by almost 43 per cent. In three months, Silvergate’s stock fell a total of 84%.
Silvergate Bank in deep trouble
As a result, the latter finds itself in a difficult situation and has had to take drastic measures to recover the losses. To regain liquidity, the bank sold almost 4.8 billion euros in assets. The bank also plans to lay off 200 employees, or 40% of its workforce. The cited reason refers to “economic realities” facing the cryptocurrency industry.
“The past few weeks have been very difficult for the digital asset industry as we all come to terms with the apparent misappropriation of client assets and other misjudgments by FTX and Alameda Research,” said Alan Lane, President and CEO of Silvergate Capital Corporation
Although the FTX implosion took place last November, its impact can still be felt by unsuspecting players. This case testifies to the far-reaching influence of FTX, a platform that has become a giant in just a few years. In addition, the bank is already the subject of an in-depth investigation by the US authorities to determine the nature of its relations with the FTX crypto exchange.
This historical situation is a reminder that the cryptocurrency sector is still young and remains ultra-volatile. For many companies, the rise has been steep, but currently some are facing a brutal setback. Especially since a majority of its companies have woven various deals and partnerships during the speculative crypto bubble. Thus, in the middle of the crypto winter, the situation of professionals specialized in the sector is extremely correlated to crypto prices, but also to the health of certain competitors or partners.