In an inaugural Substack post on Tuesday, Lane Silvergate could have continued operating after satisfying withdrawals equivalent to 70% of its demand deposits during the fourth quarter of 2022. He argued that a “coordinated attack by the Biden Administration” ultimately led to the wind-down, saying the bank chose liquidation “in the face of political pressure.”
Lane said Silvergate had held liquid assets that could be sold or pledged as collateral during periods of heavy withdrawals. In a January 2023 business update, the bank that 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. The bank said it 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. However, it differs from federal findings that attributed the bank’s liquidation to its concentrated deposit base, funding risks and weaknesses in governance and compliance.
Regulators cited risk management, compliance failures
A September 2023 by the Federal Reserve Board’s Office of Inspector General said Silvergate’s , rapid growth and multilayered funding risks . It also cited significant weaknesses in corporate governance and risk management and said examiners could have acted more aggressively and decisively.Lane said no regulator had proven that Silvergate’s anti-money laundering (AML) controls failed. In July 2024, the Securities and Exchange Commission (SEC) Silvergate Capital, Lane and former chief risk officer Kathleen Fraher with misleading investors about the bank’s AML program and monitoring of crypto customers.
The regulator alleged that Silvergate’s automated system failed to monitor more than $1 trillion in transactions and that the bank failed to detect nearly $9 billion in suspicious transfers among FTX entities.
Related: Silvergate’s Fraher breaks silence on settlement with Gensler’s SEC
Lane without admitting or denying the allegations, agreeing to a $1 million penalty and a five-year officer-and-director bar. Separately, the Federal Reserve Silvergate $43 million over transaction-monitoring deficiencies.
Lane also cited interagency crypto-risk statements issued in early 2023 as evidence of pressure against the industry. The statements banks to take a cautious approach to crypto-related activities, although the Fed said institutions were neither prohibited nor discouraged from serving any specific customer class. In April 2025, government agencies the statements.
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