Crypto-friendly bank Silvergate has delayed filing its 10-K, an annual report on the financial health of the company. The news has sent its stock price down 31%.
Silvergate Bank has announced that it will delay the filing of its annual 10-K report, which has sent its stock price down over 30% after hours.
A 10-K report is a document required by the Securities and Exchange Commission that provides a comprehensive overview of a company’s business and financial condition. The crypto bank stated that it would need an additional two weeks to complete the report for the 2022 fiscal year.
Silvergate explained in its late filing notice that it sold additional debt securities in January and February and expects to record further losses in the coming months.
“These additional losses will negatively impact the regulatory capital ratios of the Company and the Company’s wholly owned subsidiary, Silvergate Bank (the “Bank”), and could result in the Company and the Bank being less than well-capitalized,” the firm stated in its late notice filing.
“In addition, the Company is evaluating the impact that these subsequent events have on its ability to continue as a going concern for the twelve months following the issuance of its financial statements,” said Silvergate, adding:
“The Company is currently in the process of reevaluating its businesses and strategies in light of the business and regulatory challenges it currently faces.”
The crypto bank added that it’s in the process of conducting additional procedures and providing documentation, as requested by its independent registered public accounting firm, to complete a series of audits.
Silvergate explained that a number of factors have, or will have an impact on the financial health of the firm in the near future.
Among those include the substantial market volatility experienced in Q4 2022, several high-profile bankruptcies in 2022 which has disrupted investor confidence in cryptocurrencies and stricter regulatory oversight on banks offering digital asset services.
The firm added that customer retention may be an issue, in addition to any potential liabilities or restrictions of the company that may be brought about by litigation.
Silvergate’s death spiral is going to be rough for crypto.
I don’t think retail investors realize how much market maker money moved around quickly via SEN, and how many crypto exchanges were/are banking with them.
Stock almost down to its ATL after hours.
— Adam Cochran (adamscochran.eth) (@adamscochran) March 1, 2023
This is a developing story and more information will be added as it becomes available.