Former Silvergate Bank CEO Alan Lane stated that political pressure from the Biden administration forced the lender to wind down in 2023. Lane claimed the bank remained solvent after fulfilling withdrawals equal to 70% of its demand deposits in the fourth quarter of 2022.
In early 2023, the bank reported that digital asset deposits dropped 68%, falling from $11.9 billion to $3.8 billion. To manage liquidity, Silvergate sold $5.2 billion in debt securities, resulting in a $718 million loss, while holding $4.6 billion in cash by year-end.
Federal regulators attributed the liquidation to a concentrated deposit base, funding risks, and governance weaknesses. A report from the Federal Reserve Board’s Office of Inspector General in September 2023 noted that examiners could have acted more decisively regarding the bank's risks.
In July 2024, the SEC charged Silvergate Capital and its executives with misleading investors regarding AML programs. The regulator alleged that the bank failed to monitor over $1 trillion in transactions and missed $9 billion in suspicious transfers involving FTX entities.
Alan Lane settled SEC charges by agreeing to a $1 million penalty and a five-year ban from serving as an officer or director. Additionally, the Federal Reserve imposed a $43 million fine on Silvergate due to deficiencies in its transaction-monitoring systems.
