On Thursday, Silvergate Capital Corp reported a major decline in fourth-quarter crypto-related deposits. The company also announced that it would reduce its workforce by 40%, or about 200 employees. 

The company’s shares lost roughly 88 per cent of their value in 2022 and were down 40 per cent in premarket trading, according to Moneycontrol.

Silvergate Capital also had a drop in total deposits from digital assets to $3.8 billion at the end of December 2022, compared with $11.9 billion on September 30, 2022, as per the preliminary earnings report.

To maintain liquidity, the crypto-focused bank sold $5.2 billion of debt securities at a loss of $718 million in the fourth quarter.

The crypto sector has been facing major losses. More than a trillion dollars in value was wiped out last year. The rising interest rate is increasing worries about an economic downturn. 

Meanwhile, this downfall has eliminated key industry players such as crypto hedge fund Three Arrows Capital and crypto lender Celsius.