Former Silvergate Bank CEO Alan Lane disputes the official explanation for the crypto lender’s 2023 shutdown, asserting that the institution remained financially viable but was compelled to close due to pressure from the Biden administration.
In his first Substack post on Tuesday, Lane accused the Biden administration of orchestrating a campaign against Silvergate that he claims led to its liquidation. He argued that political pressure prompted the shutdown despite the bank having survived a massive wave of customer withdrawals.
Lane noted that during Q4 2022, Silvergate satisfied withdrawals equal to about 70% of its demand deposits. He contended that navigating this outflow without slipping into insolvency proved the bank could have remained operational.
Silvergate revealed the scale of the deposit flight in an early‑2023 operational report, showing that digital‑asset client balances dropped to $3.8 billion by December 31, down from $11.9 billion at the end of the prior quarter—a 68% decline.
To meet those withdrawal demands, Silvergate tapped its balance sheet heavily. The quarter’s asset sales produced a $718 million loss after the bank offloaded $5.2 billion of its debt‑investment portfolio. By year‑end, the bank held $4.6 billion in cash and other quickly liquidatable assets. Lane added that further liquid resources could have been sold or pledged as collateral if needed.
Lane’s narrative clashes with later findings by federal investigators, who pointed to internal weaknesses at Silvergate as the cause of its liquidation, rather than any government‑driven crackdown on crypto.
Regulatory Findings Contest Lane’s Version of Events at Silvergate
In a September 2023 report, the Federal Reserve’s inspector general cited multiple factors behind Silvergate’s liquidation decision, highlighting the bank’s reliance on digital‑asset deposits, its rapid expansion, and various funding‑related vulnerabilities.
The report further noted deficiencies in Silvergate’s risk controls, corporate governance, and risk‑management frameworks. It also criticised regulators, suggesting they could have stepped in sooner and taken stronger action once the bank’s weaknesses became apparent.
Lane has also defended Silvergate’s anti‑money‑laundering controls, insisting that regulators never demonstrated a failure of the bank’s AML framework.
Regulatory action followed the bank’s closure. In July 2024, the SEC charged Lane, Silvergate Capital, and former chief risk officer Kathleen Fraher with misleading investors about the efficacy of the bank’s Bank Secrecy Act and AML programme, as well as its supervision of crypto clients such as FTX.
The SEC alleged that Silvergate’s automated transaction‑monitoring system let more than $1 trillion in payments pass through its network without screening, and that roughly $9 billion of suspicious activity tied to FTX‑related parties escaped detection.
Lane settled the SEC matter without admitting or denying the allegations, agreeing to pay a $1 million civil penalty and accepting a five‑year ban from serving as an officer or director.
Silvergate also faced Federal Reserve enforcement, which levied a $43 million penalty for shortcomings in its transaction‑monitoring practices. The Fed later confirmed that Silvergate finished its liquidation, repaid all depositors, and stopped operating as a bank.
Lane Cites 2023 Crypto‑Banking Guidance as Evidence of Government Pressure
Lane’s argument for government pressure extends beyond Silvergate’s regulatory treatment. He pointed to joint guidance released by federal banking agencies in early 2023 as proof, in his view, of a broader campaign to curb the crypto sector.
The guidance warned banks about the risks tied to crypto‑related activities, although the Federal Reserve maintained that banks were not barred or discouraged from serving any specific customer group.
The agencies retracted those statements in April 2025.