Silvergate ex-CEO blames Biden administration for 2023 wind-down

Alan Lane wrote in an inaugural Substack post that political and regulatory pressure from the Biden administration forced Silvergate to wind down voluntarily in 2023. He argued the bank remained solvent after a large deposit run and could have continued after meeting withdrawals equal to about 70% of its demand deposits in the fourth quarter of 2022.

Silvergate reported that digital asset deposits fell 68% in the quarter, from $11.9 billion to $3.8 billion. The bank sold $5.2 billion of debt securities and recorded a $718 million loss. It reported $4.6 billion in cash and equivalents at year-end 2022.

Lane wrote the bank held liquid assets that could have been sold or pledged as collateral during heavy withdrawals. He described the situation as a “coordinated attack by the Biden Administration” and wrote the firm chose liquidation “in the face of political pressure.”

A September 2023 review by the Federal Reserve Board’s Office of Inspector General found Silvergate’s reliance on crypto depositors, rapid growth, multilayered funding risks and weaknesses in corporate governance and risk management contributed to the liquidation. The review added that examiners could have acted more aggressively.

In July 2024 the Securities and Exchange Commission charged Silvergate Capital, Lane and former chief risk officer Kathleen Fraher with misleading investors about the bank’s anti-money-laundering program and monitoring of crypto customers. The SEC alleged an automated system failed to monitor more than $1 trillion in transactions and that the bank did not detect nearly $9 billion in suspicious transfers among FTX entities.

Lane settled the SEC charges without admitting or denying the allegations, agreeing to a $1 million penalty and a five-year officer-and-director bar. Separately, the Federal Reserve fined Silvergate $43 million over transaction-monitoring deficiencies.

Lane pointed to interagency statements on crypto risk issued in early 2023 that urged banks to take a cautious approach to crypto-related activity. The Federal Reserve stated the guidance did not prohibit institutions from serving any customer class. Agencies withdrew the guidance in April 2025.

Lane presented a political and regulatory explanation for the bank’s exit. Federal reviews and enforcement actions identified concentrated deposits, funding risks and governance and compliance weaknesses as contributing factors in the wind-down.