Silvergate ex-CEO blames Biden pressure for bank’s 2023 wind-down
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Written by
Simonas Brazionis - Updated 2026-09-09 19:24:31
Silvergate's ex-CEO, Alan Lane, has attributed the crypto-focused lender's voluntary wind-down in 2023 to political and regulatory pressure from the Biden administration. Lane maintains that the bank remained solvent despite experiencing a significant deposit run.
In a recent Substack post, Lane asserted that Silvergate could have continued operations even after fulfilling withdrawals amounting to 70% of its demand deposits in Q4 2022. He characterized the events leading to the wind-down as a “coordinated attack by the Biden Administration.”
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Silvergate's Financial Position and Lane's Claims
Lane noted that Silvergate possessed liquid assets that could be sold or pledged as collateral during periods of high withdrawals. A January 2023 business update from the bank reported a 68% decrease in digital asset deposits, falling from $11.9 billion to $3.8 billion in the quarter.
Silvergate sold $5.2 billion in debt securities, incurring a $718 million loss, and reported $4.6 billion in cash and equivalents at year-end. Lane's claims offer a firsthand perspective on whether U.S. agencies aimed to restrict crypto companies' access to banking services.
Federal Findings and Regulatory Actions
Lane's account diverges from federal findings, which attributed the bank's liquidation to its concentrated deposit base, funding risks, and deficiencies in governance and compliance. 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 multi-layered funding risks were key factors.
The review also highlighted significant weaknesses in corporate governance and risk management, suggesting that examiners could have acted more assertively. Lane also cited interagency crypto-risk statements issued in early 2023 as evidence of pressure on the industry.
Allegations of AML Failures and Penalties
Lane maintained that no regulator had substantiated failures in Silvergate’s anti-money laundering (AML) controls. However, in July 2024, the Securities and Exchange Commission (SEC) charged Silvergate Capital, Lane, and former chief risk officer Kathleen Fraher with misleading investors concerning the bank’s AML program.
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 among FTX entities. Lane resolved the SEC’s charges without admitting or denying the allegations, agreeing to a $1 million penalty and a five-year prohibition from serving as an officer or director. Separately, the Federal Reserve imposed a $43 million fine on Silvergate for deficiencies in transaction monitoring.
