Silvergate CEO says crypto-focused financial institution has ample liquidity, resilient steadiness sheet

Alan Lane, the CEO of digital asset-focused financial institution Silvergate Capital (NYSE:SI), mentioned Monday that his firm has an sufficient liquidity place in addition to a resilient steadiness sheet regardless of market turmoil triggered from the implosion of crypto alternate FTX (FTT-USD).

His remarks come as “there has additionally been loads of hypothesis – and misinformation – being unfold by brief sellers and different opportunists attempting to capitalize on market uncertainty,” he wrote in a public letter.

Lane identified that Silvergate (SI) holds money and securities that exceed its digital asset-related deposit liabilities within the occasion of elevated deposit outflows. Final week, the financial institution disclosed that its common quarter-to-date digital buyer deposits slumped to $9.8B (excluding FTX deposits) as of November 15 from $11.9B as of September 30.

However Morgan Stanley just lately lowered its 2023 EPS estimate for SI, as its digital deposit balances probably have additional room to fall, and its sources of liquidity to fund deposit outflows are “costlier than SI’s zero-cost digital deposits, and can weigh on earnings.”

“Whereas this has been a turbulent time within the digital asset business, our prospects’ deposits are, and have at all times been, safely held,” Lane emphasised.

SI inventory edged down 0.3% in prolonged buying and selling hours and plunged almost 84% year-to-date.

Beforehand, (Nov. 28) some FTX prospects had been reportedly informed to ship wire transfers via Alameda, which was allowed to have accounts at Silvergate.