Silvergate ex‑CEO attributes 2023 wind‑down to Biden administration pressure
Lane blames political pressure for Silvergate wind‑down
Former Silvergate Bank chief executive Alan Lane says a “coordinated attack” by the Biden administration made the crypto‑focused lender’s 2023 voluntary liquidation unavoidable. In a Substack post, he argues the bank remained solvent after handling a large deposit run.
Key points
- Lane claims Silvergate could have kept operating after meeting withdrawals equal to 70% of demand deposits in Q4 2022.
- The bank’s digital‑asset deposits fell 68% to $3.8 billion in that quarter, and it sold $5.2 billion of debt securities, taking a $718 million loss.
- Federal Reserve’s Office of Inspector General cited dependence on crypto depositors, funding risks, and governance weaknesses as reasons for liquidation.
- The SEC charged Silvergate Capital, Lane, and former CRO Kathleen Fraher in 2024 for alleged AML (anti‑money‑laundering) failures; they settled with a $1 million penalty and a five‑year director ban.
- The Federal Reserve fined Silvergate $43 million for transaction‑monitoring deficiencies.
Alan Lane’s Substack claim
In his Substack post, Lane says the bank held enough liquid assets to sell or pledge as collateral during heavy withdrawals. He attributes the decision to liquidate to political pressure, calling it a “coordinated attack by the Biden Administration.” He also references early‑2023 inter‑agency statements that urged banks to be cautious about crypto activities, which were later withdrawn in April 2025.
Federal Reserve and OIG report
The Federal Reserve Board’s Office of Inspector General released a September 2023 review that identified several problems: heavy reliance on crypto‑related depositors, rapid growth, multilayered funding risks, and significant weaknesses in corporate governance and risk management. The report did not mention political pressure.
SEC settlement and Fed fine
The SEC alleged that Silvergate’s automated AML system failed to monitor over $1 trillion in transactions and missed nearly $9 billion in suspicious transfers involving FTX entities. Lane and the bank settled without admitting wrongdoing, paying a $1 million penalty and accepting a five‑year ban on holding officer or director positions. The Federal Reserve later imposed a $43 million fine for transaction‑monitoring lapses.
Confirmed facts
- Silvergate voluntarily entered liquidation in 2023.
- Digital‑asset deposits dropped from $11.9 billion to $3.8 billion in Q4 2022.
- The bank sold $5.2 billion of debt securities, incurring a $718 million loss.
- Year‑end cash and equivalents were $4.6 billion.
- The Federal Reserve OIG report cited deposit concentration, funding risks, and governance weaknesses as causes for liquidation.
- The SEC charged Silvergate Capital, Lane, and Fraher in July 2024; they settled with a $1 million penalty and a five‑year officer‑and‑director bar.
- The Federal Reserve fined Silvergate $43 million for transaction‑monitoring deficiencies.
Unresolved issues
- Lane’s claim that political pressure from the Biden administration forced the wind‑down is not confirmed by any regulator report.
- No regulator has publicly proven that Silvergate’s AML controls failed, contrary to the SEC’s allegations.
Implications for crypto banking
The dispute highlights the tension between crypto‑focused banks and U.S. regulators. If political pressure did influence the decision, it could affect how other crypto‑related financial firms assess regulatory risk.
Future outlook
No new actions have been announced by Silvergate, regulators, or the Biden administration regarding the 2023 wind‑down.
