Silvergate ex-CEO blames Biden pressure for bank’s 2023 wind-down

Former Silvergate Bank CEO Alan Lane said political and regulatory pressure from the Biden administration drove the crypto-focused lender’s voluntary wind-down in 2023, arguing that the bank remained solvent after weathering a deposit run.

In an inaugural Substack post on Tuesday, Lane said Silvergate could have continued operating after satisfying withdrawals equivalent to 70% of its demand deposits during the fourth quarter of 2022. He argued that a “coordinated attack by the Biden Administration” ultimately led to the wind-down, saying the bank chose liquidation “in the face of political pressure.”

Lane said Silvergate had held liquid assets that could be sold or pledged as collateral during periods of heavy withdrawals. In a January 2023 business update, the bank reported that digital asset deposits fell 68% from $11.9 billion to $3.8 billion during the quarter. Silvergate sold $5.2 billion of debt securities, recording a $718 million loss. The bank said it had $4.6 billion in cash and equivalents at year-end. 

Lane’s account adds a firsthand claim to the debate over whether US agencies sought to restrict crypto companies’ access to banking. However, it differs from federal findings that attributed the bank’s liquidation to its concentrated deposit base, funding risks and weaknesses in governance and compliance.