Silvergate's Former CEO Blames Biden Pressure for Bank's Demise

Former Silvergate Bank CEO Alan Lane has come forward to explain the bank's decision to wind down in 2023. According to Lane, the bank faced intense political and regulatory pressure from the Biden administration, which ultimately led to its demise. The bank had held liquid assets that could be sold or pledged as collateral during periods of heavy withdrawals.

Lane claims that Silvergate remained solvent even after satisfying withdrawals equivalent to 70% of its demand deposits in the fourth quarter of 2022. However, he argues that a 'coordinated attack by the Biden Administration' made it impossible for the bank to continue operating.

The Federal Reserve Board's Office of Inspector General reviewed Silvergate's liquidation and cited weaknesses in corporate governance, risk management, and compliance as contributing factors. The review also noted that Silvergate's dependence on crypto depositors and rapid growth led to its downfall.

Regulators had previously charged Lane, former chief risk officer Kathleen Fraher, and Silvergate Capital with misleading investors about the bank's anti-money laundering (AML) program and monitoring of crypto customers. The charges were settled without admitting or denying wrongdoing.