The embattled crypto lender disclosed late Wednesday that it sold more securities in January and February than was initially estimated to repay “outstanding advances” received from the Federal Home Loan Bank of San Francisco. The company expects to record further losses beyond the $887 million it reported in Q4 2022.
“All advances were at all times fully collateralized while they were outstanding,” the Federal Home Loan Bank of San Francisco said in a statement quoted by Bloomberg. Following the announcement by Silvergate, JPMorgan analysts downgraded its stock from Neutral to Underweight and withdrew their price target for the asset.
Silvergate claimed that its team “requires additional time to perform analysis, record journal entries related to subsequent events and to complete management’s evaluation of internal controls over financial reporting.”
“The Company is currently analyzing certain regulatory and other inquiries and investigations that are pending with respect to the Company,” the bank added.
As concerns about Silvergate’s financial health mount, crypto companies rush to cut ties with the embattled entity. Earlier this week, LedgerX, an FTX survivor that remained solvent after the collapse of its parent in November, announced it would now use Signature Bank for its domestic wire transfers. Coinbase, too, announced Thursday that it is “no longer accepting or initiating payments to or from Silvergate.”
“Coinbase will be facilitating institutional client cash transactions with our other banking partners and have taken proactive action to help ensure that clients experience no impact from this change,” the exchange tweeted.