Cryptocurrency bank Silvergate has lost 68% of its digital deposits. Here's what we know about its predicament.

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Cryptocurrency bank Silvergate has lost 68% of its digital deposits. Here's what we know about its predicament.
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The bank shored up liquidity as institutions in the digital-currency industry scrambled to lower risks.

Following the flow of high-profile collapses in the virtual-currency industry last year, Silvergate Capital Corp. on Thursday surprised investors with some startling fourth-quarter numbers two weeks early.

The news came after a bruising year for the crypto industry, including the bankruptcy of FTX, the collapse of BlockFi and fraud charges against the founder of Celsius Network. FHLB borrowings funded only 5% of $13.9 billion in total funding as of Sept. 30. That is a level Marinac termed “normal,” because the current industry norm is for FHLB borrowings to provide about 5% to 6% of funding.As part of its efforts to raise cash to cover deposit outflows during the fourth quarter, Silvergate said it sold $5.2 billion in securities, booking related losses of about $718 million.

Other banks with crypto exposure In an interview with MarketWatch on Jan. 5, Christopher Marinac, the director of research at Janney Montgomery Scott in Atlanta, said the U.S. banking industry’s exposure to the virtual-currency industry was “very limited,” with only three others significantly exposed:

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