• Crypto bank Silvergate has announced the suspension of dividends on its series A preferred stock.
• The company reported a $1 billion loss in the fourth quarter and has cut staff by 20%.
• The company’s shares fell more than 11% pre-market after the announcement.
Crypto-friendly bank Silvergate recently announced the suspension of dividend payments on its series A preferred stock. The US-based company stated that the decision was reflective of its focus on maintaining a highly liquid balance sheet and strong capital position while navigating the recent volatility in the digital asset industry. The news sent shockwaves through the crypto space and the company’s shares fell more than 11% pre-market after the announcement.
Silvergate’s decision follows a turbulent period for the company. In the fourth quarter, the company reported a $1 billion loss as a result of the crypto bear market and fallout from the collapse of crypto exchange FTX. To weather the economic storm, the company has also had to cut its staff by 20%.
The company’s Board of Directors stated that it will re-examine the payment of quarterly dividends at a later date, depending on how the market conditions evolve. This statement has been met with mixed reactions from investors, with some expressing optimism that the company’s fortunes will improve while others remain skeptical and wary of the long-term outlook.
The news has also sent shockwaves through the crypto industry as a whole. The suspension of dividends on the company’s series A preferred stock highlights just how volatile the crypto market can be and serves as a reminder of the risks associated with investing in digital currencies. With the crypto market on the rise, investors should be aware of the potential pitfalls and be sure to conduct their due diligence before investing.
Ultimately, Silvergate’s decision to suspend dividend payments is a sign of the times and a reminder of the risks inherent in the crypto market. While the future remains uncertain, Silvergate’s decision highlights the need for investors to be prudent when it comes to investing in digital currencies.