Lane Accuses Biden Administration of Pushing Silvergate Into Liquidation
Silvergate Bank's former CEO Alan Lane has accused the Biden administration of pushing his bank into liquidation in 2023. According to Lane, the bank had sufficient financial resources to continue operating but ultimately chose to shut down under pressure from government officials.
Lane made these claims in a recent Substack article, where he also argued that political forces influenced the decision to close Silvergate despite its ability to withstand an exceptional surge in customer withdrawals. In the fourth quarter of 2022, Silvergate met withdrawal demands amounting to roughly 70% of its demand deposits.
Lane pointed out that doing so without becoming insolvent demonstrated the bank's solvency and ability to continue operating. However, under pressure from regulators, Silvergate ultimately disclosed a severe decline in digital-asset client deposits, which fell to $3.8 billion by December 31, down from $11.9 billion at the close of the previous quarter.
The Federal Reserve's inspector general later concluded that vulnerabilities within the bank itself contributed to its liquidation, rather than government efforts against the crypto industry. Lane has pushed back against criticism of Silvergate's anti-money laundering controls, maintaining that regulators never proved the bank's AML framework had failed.