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FinTech death toll rises: FTX collapse causes a massive bank run 🤯; 2023 will be the year when the verticalization of FinTech continues 🚀; What Coinbase’s $100M fine really means? 🤔
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FinTech death toll rises: FTX collapse causes a massive bank run 🤯; 2023 will be the year when the verticalization of FinTech continues 🚀; What Coinbase’s $100M fine really means? 🤔

FinTech is Eating the World, 6 January

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Linas Beliūnas
Jan 06, 2023
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Linas's Newsletter
Linas's Newsletter
FinTech death toll rises: FTX collapse causes a massive bank run 🤯; 2023 will be the year when the verticalization of FinTech continues 🚀; What Coinbase’s $100M fine really means? 🤔
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Hey Everyone,

TGIF! Yesterday’s issue was super hot. Today we’re continuing with the same energy and looking at the rising FinTech death toll as FTX collapse causes a massive bank run (a deep look at both micro and macro impacts, what this means about the future + 6 bonus read), see why 2023 will be the year when the verticalization of FinTech continues (an example of FinTech that’s doing it right + probably the coolest FinTech webpage ever), and see what Coinbase’s $100M fine really means (hint: it tells more about others than about Coinbase itself). Let’s jump straight into the incredible stuff:

FinTech death toll rises: FTX collapse causes a massive bank run 🤯

The news 🗞 The fraudulent cryptocurrency exchange FTX's collapse caused a bank run at Silvergate Bank with customers pulling out a whopping $8.1 billion in deposits, therefore, forcing the bank to sell assets at a massive loss 🤯

How we got here 👉 Silvergate is the largest crypto bank in the US and one of the few allowing customers to move fiat currencies onto crypto exchanges. The bank was accepting FTX and Alameda deposits and processing wire transfers for companies and individuals to the exchange (FTX and other companies controlled by the crypto exchange’s founder, Sam Bankman-Fried, reportedly accounted for about $1 billion of the bank’s deposits).

Their November collapse of FTX rattled the crypto market and sent Silvergate’s stock down sharply. Following that, crypto-related deposits plunged 68% in the fourth quarter, as per Silvergate’s early release of some quarterly results.

To satisfy the withdrawals, Silvergate liquidated the debt it was holding on its balance sheet. The $718 million it lost selling the debt far exceeds the bank’s total profits. Since at least 2013 😳

And that’s not even it. Some more crazy developments (+6 bonus reads):

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