Silvergate Bank has announced it will delay filing its annual 10-K report, which has sent its share price down more than 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 will need two additional weeks to complete the report for the fiscal year 2022.
Silvergate explained in its last 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 affect the regulatory capital ratios of the Company and its wholly-owned subsidiary, Silvergate Bank (the “Bank”), and may cause the Company and the Bank to be less than capitalized,” the company said. in late-notice of its filing.
“In addition, the Company evaluates the impact of these subsequent events on its ability to continue as a going concern for twelve months after the publication of its financial statements,” said Silvergate, adding:
“The company is currently in the process of re-evaluating its business and strategy due to the business and regulatory challenges it currently faces.”
The crypto bank added that it is in the process of carrying out additional procedures and providing documentation, as requested by the registered public accounting firm, to complete a series of audits.
Silvergate explained that several factors could have an impact on the company’s financial health in the future.
These include the market volatility experienced in Q4 2022, several high-profile bankruptcies in 2022 that undermined investor confidence in cryptocurrencies and stricter regulatory oversight of banks that offer digital asset services.
The company added that customer retention may be an issue, in addition to potential liabilities or limitations the company may face through litigation.
Silvergate’s death spiral will be harsh for crypto.
I don’t think retail investors realize how much market maker money is moved around quickly through SEN, and how many crypto exchanges were/banking with them.
Stocks are almost down to ATL after hours.
— Adam Cochran (adamscochran.eth) (@adamscochran) March 1, 2023
Cointelegraph reached out to Silvergate for comment but did not receive a response at the time of publication.