Key facts
- Former Silvergate Bank CEO Alan Lane claims the Biden administration's pressure led to the bank's 2023 liquidation.
- Lane argues Silvergate was solvent and could have continued operating.
- Federal regulators cited risk management and compliance failures as reasons for the bank's demise.
- The SEC charged Silvergate, Lane, and a former executive with misleading investors about AML controls.
- Lane settled SEC charges, agreeing to a $1 million penalty and a five-year director ban.
Former Silvergate Bank CEO Alan Lane has asserted that political and regulatory pressure from the Biden administration was the driving force behind the crypto-focused lender's voluntary wind-down in 2023. Lane argued in a recent Substack post that the bank remained solvent and could have continued operations, having successfully managed withdrawals equivalent to 70% of its demand deposits in the fourth quarter of 2022.
Lane described the situation as a "coordinated attack by the Biden Administration" that made continued operation untenable, leading the bank to choose liquidation "in the face of political pressure." He noted that Silvergate possessed liquid assets that could have been sold or pledged as collateral during periods of heavy withdrawals. The bank's January 2023 business update revealed a significant drop in digital asset deposits, from $11.9 billion to $3.8 billion, and the sale of $5.2 billion in debt securities for a $718 million loss, while maintaining $4.6 billion in cash and equivalents.
Lane's account offers a direct claim regarding alleged efforts by U.S. agencies to restrict crypto companies' banking access, a perspective that contrasts with official findings. Federal regulators, including the Federal Reserve Board's Office of Inspector General in a September 2023 review, attributed Silvergate's liquidation to its heavy reliance on crypto depositors, rapid expansion, funding risks, and significant weaknesses in corporate governance and risk management.
Despite these findings, Lane maintained that no regulator had proven Silvergate's anti-money laundering (AML) controls had failed. However, in July 2024, the Securities and Exchange Commission (SEC) charged Silvergate Capital, Lane, and former chief risk officer Kathleen Fraher with misleading investors about the bank's AML program and its monitoring of crypto customers. The SEC alleged that the bank's automated system failed to monitor over $1 trillion in transactions and missed nearly $9 billion in suspicious transfers involving FTX entities.
Lane settled the SEC's charges without admitting or denying the allegations, agreeing to a $1 million penalty and a five-year ban from serving as an officer or director. The Federal Reserve separately fined Silvergate $43 million for deficiencies in its transaction monitoring. Lane also pointed to interagency crypto-risk statements issued in early 2023, which urged caution towards crypto activities, as further evidence of pressure against the industry, although the Fed stated institutions were not prohibited from serving any customer class. These statements were later withdrawn by government agencies in April 2025.
Discussion