Silvergate Bank, which currently faces a class-action lawsuit over its FTX and Alameda Research dealings, has announced a $1 billion net loss attributable to common shareholders in the fourth quarter of 2022. 

In a report published by the United States Securities and Exchange Commission (SEC), the digital asset bank highlighted that it saw significant outflows of deposits in the last quarter of 2022 and made actions to maintain cash liquidity, including wholesale funding and selling debt securities.

The company also highlighted a “transformational shift” in the digital asset space. It noted that a crisis of confidence throughout the ecosystem led customers to take a “risk off” position on crypto trading platforms.

According to the report, the average digital asset customer deposits in the fourth quarter of 2022 was $7.3 billion. This is significantly lower compared to the third quarter of 2022 where deposits were around $12 billion.

Despite the losses, the company noted that it is taking action to prepare for a sustained period of lower deposits. According to the announcement, Silvergate is managing its expense base and evaluating its product portfolio and customer relationships.

Amid the challenges, Silvergate CEO Alan Lane highlighted that the company still believes in the digital asset industry and remains “committed to maintaining a highly liquid balance sheet with a strong capital position.”

Related: Silvergate hit with another class-action suit, this time for securities law violations

On Jan. 5, the company laid off around 200 employees, which accounted for roughly 40% of its workforce, as part of its efforts to stay afloat. In addition, the company also shelved plans to launch a digital currency project, writing off $200 million used to purchase technology developed by Facebook.

Reacting to the situation, rating firm Moody’s Investors Service downgraded its rating of Silvergate Bank. The rating went from Baa2, which was “lower-medium grade,” to Ba1, which is considered “junk.” Apart from this, Moody’s also highlighted that the outlook for both Silvergate Capital and its bank is negative.