Former Silvergate Bank CEO Alan Lane stated that political and regulatory pressure from the Biden administration drove the crypto-focused lender's voluntary wind-down in 2023, asserting that the bank remained solvent despite weathering a deposit run.
Writing in a Substack post on Tuesday, Lane argued that Silvergate could have continued operations after fulfilling withdrawals equal to 70% of its demand deposits during the fourth quarter of 2022. He characterized the wind-down as the result of a coordinated attack by the administration, stating that the bank chose liquidation under political pressure.
According to Lane, Silvergate held liquid assets that could be sold or pledged as collateral during heavy withdrawals. A January 2023 business update from the bank showed that digital asset deposits dropped 68% from $11.9 billion to $3.8 billion during the quarter. To meet demands, Silvergate sold $5.2 billion of debt securities at a $718 million loss, ending the year with $4.6 billion in cash and equivalents.
Lane's account contributes to ongoing discussions regarding whether US agencies attempted to limit crypto firms' access to banking services. However, his version contrasts with federal findings, which attributed the liquidation to a concentrated deposit base, funding risks, and weaknesses in governance and compliance.
Federal Findings Cite Governance and Risk Management Issues
A September 2023 review by the Federal Reserve Board's Office of Inspector General concluded that Silvergate's reliance on crypto depositors, rapid expansion, and complex funding risks caused its liquidation. The report also highlighted significant corporate governance and risk management weaknesses, noting that examiners could have acted more decisively.
Lane countered that no regulator had proven a failure in Silvergate's anti-money laundering (AML) controls. Nevertheless, in July 2024, the Securities and Exchange Commission (SEC) charged Silvergate Capital, Lane, and former chief risk officer Kathleen Fraher with misleading investors regarding the bank's AML program and its monitoring of crypto customers.
The SEC alleged that Silvergate's automated system failed to monitor over $1 trillion in transactions and did not detect nearly $9 billion in suspicious transfers involving FTX entities.
Regulatory Penalties and Subsequent Developments
Lane settled the SEC charges without admitting or denying the allegations, agreeing to a $1 million financial penalty and a five-year officer-and-director ban. In a separate action, the Federal Reserve penalized Silvergate $43 million over transaction-monitoring deficiencies.
Lane also pointed to interagency crypto-risk statements released in early 2023 as proof of industry pressure. Those statements advised banks to exercise caution regarding crypto-related activities, though the Federal Reserve maintained that institutions were not prohibited or discouraged from serving particular customer classes. Government agencies eventually withdrew the statements in April 2025.
