Silvergate CEO Blames Biden Pressure for Bank's Wind-Down

Silvergate Bank's voluntary wind-down in 2023 was largely driven by pressure from the Biden administration, according to former CEO Alan Lane. In a Substack post, Lane claimed that Silvergate could have continued operating if it had been allowed to satisfy withdrawals equivalent to 70% of its demand deposits during the fourth quarter of 2022.

Lane argued that the bank remained solvent after weathering a deposit run and held liquid assets that could be sold or pledged as collateral. He cited the bank's January 2023 business update, which reported 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, but 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.

Regulators have attributed the bank's liquidation to its concentrated deposit base, funding risks, and weaknesses in governance and compliance. However, Lane disputed this narrative, saying no regulator had proven that Silvergate's anti-money laundering controls failed.