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Silvergate ex-CEO blames Biden pressure for 2023 wind-down
Alan Lane said the bank stayed solvent after meeting withdrawals equal to 70% of demand deposits in Q4 2022, while a later Federal Reserve Inspector General review pointed to deposit concentration, funding risks, and governance and compliance weaknesses.
Silvergate’s former CEO Alan Lane said political and regulatory pressure from the Biden administration made the crypto-focused lender’s continued operation untenable, leading to its voluntary wind-down in 2023, according to an inaugural Substack post published Tuesday.
Lane argued Silvergate could have kept operating after satisfying withdrawals equivalent to 70% of its demand deposits during the fourth quarter of 2022, and he said the bank held liquid assets that could be sold or pledged as collateral during periods of heavy withdrawals.
He added that a January 2023 business update showed digital asset deposits fell 68% from $11.9 billion to $3.8 billion in the quarter. The bank also sold $5.2 billion of debt securities and recorded a $718 million loss, and it reported $4.6 billion in cash and equivalents at year-end.
Lane’s account adds a firsthand claim to a broader debate about whether US agencies sought to limit crypto firms’ access to banking, but it contrasts with federal findings. A September 2023 review by the Federal Reserve Board’s Office of Inspector General attributed the liquidation to Silvergate’s dependence on crypto depositors, rapid growth and multilayered funding risks, and it also cited significant weaknesses in corporate governance and risk management.