Former Silvergate CEO attributes 2023 bank closure to Biden administration pressure
Alan Lane challenged federal assessments that pointed to concentrated cryptocurrency deposits, funding vulnerabilities and deficiencies in Silvergate's risk oversight and anti-money laundering systems.
Alan Lane, who previously served as CEO of Silvergate Bank, attributed the cryptocurrency-oriented institution's voluntary liquidation in 2023 to political and regulatory pressures emanating from the Biden administration, maintaining that the financial institution remained financially viable even after enduring a massive deposit exodus.
In a debut post published on Substack this Tuesday, Lane maintained that Silvergate possessed the capability to continue its operations following the fulfillment of withdrawal requests totaling approximately 70% of its demand deposits throughout the final quarter of 2022. He contended that a "coordinated attack by the Biden Administration" was the decisive factor leading to the wind-down, asserting that the institution opted for liquidation "in the face of political pressure."
According to Lane, Silvergate maintained liquid assets available for sale or use as pledged collateral throughout periods of substantial withdrawals. The bank disclosed in a January 2023 business update that digital asset deposits experienced a 68% decline from $11.9 billion down to $3.8 billion throughout the quarter. Silvergate liquidated $5.2 billion worth of debt securities, documenting a $718 million loss. The institution reported holding $4.6 billion in cash and equivalents at the conclusion of the year.
Lane's narrative introduces a direct firsthand assertion into the ongoing debate regarding whether United States agencies actively worked to limit cryptocurrency companies' ability to access banking services. Nevertheless, his version contrasts sharply with federal conclusions that ascribed the bank's liquidation to its concentrated deposit structure, funding vulnerabilities and shortcomings in governance and regulatory compliance.
Regulators cited risk management, compliance failures
A review conducted in September 2023 by the Office of Inspector General within the Federal Reserve Board determined that Silvergate's reliance on cryptocurrency depositors, accelerated expansion and complex funding vulnerabilities contributed to its liquidation. The review additionally identified substantial shortcomings in corporate governance and risk oversight and concluded that examiners could have taken more aggressive and decisive action.
Lane asserted that no regulatory authority had demonstrated that Silvergate's anti-money laundering (AML) controls experienced failures. In July 2024, the Securities and Exchange Commission (SEC) brought charges against Silvergate Capital, Lane and former chief risk officer Kathleen Fraher for misleading investors regarding the bank's AML program and its monitoring of cryptocurrency customers.
The regulatory body alleged that Silvergate's automated monitoring system failed to oversee more than $1 trillion in transactions and that the institution failed to identify nearly $9 billion in suspicious transfers occurring among FTX entities.
Lane resolved the SEC's charges without admitting or denying the allegations, consenting to a $1 million penalty and accepting a five-year officer-and-director bar. In a separate action, the Federal Reserve imposed a $43 million fine on Silvergate regarding transaction-monitoring deficiencies.
Lane additionally referenced interagency crypto-risk statements released in early 2023 as supporting evidence of pressure directed against the industry. The statements encouraged banks to adopt a cautious approach toward crypto-related activities, though the Fed clarified that institutions were neither prohibited nor discouraged from providing services to any specific customer class. In April 2025, government agencies retracted the statements.