SKN | Former Silvergate CEO Blames Biden-Era Pressure for Bank’s 2023 Wind-Down

Key Points:

• Former Silvergate CEO Alan Lane says political and regulatory pressure from the Biden administration made continued operations untenable despite the bank remaining solvent.
• Lane argues Silvergate had sufficient liquidity after meeting withdrawals equal to roughly 70% of its demand deposits in late 2022.
• Federal findings and subsequent enforcement actions instead pointed to concentrated crypto deposits, funding risks, governance weaknesses and deficiencies in transaction monitoring.

Lane Says Political Pressure Forced Silvergate’s Exit

Former Silvergate Bank CEO Alan Lane has offered a firsthand account of the bank’s 2023 voluntary liquidation, arguing that pressure from the Biden administration ultimately forced the crypto-focused lender to wind down.

In his first Substack post, Lane described what he called a “coordinated attack by the Biden Administration,” saying Silvergate could have continued operating after surviving a severe deposit run in the fourth quarter of 2022.

According to Lane, the bank satisfied withdrawals equivalent to approximately 70% of its demand deposits during the period while retaining liquid assets that could be sold or pledged as collateral.

Silvergate’s January 2023 business update showed the scale of the liquidity shock. Digital-asset deposits fell 68% during the fourth quarter, from $11.9 billion to $3.8 billion. The bank sold approximately $5.2 billion of debt securities, generating a $718 million loss, while reporting $4.6 billion in cash and equivalents at year-end.

Lane maintains that the institution’s decision to liquidate was ultimately driven by political pressure rather than an inability to meet its obligations.

Federal Findings Pointed to Broader Risks

Lane’s account adds another perspective to the long-running debate over whether US regulators sought to restrict cryptocurrency companies’ access to the banking system.

Federal findings, however, identified a different set of factors behind Silvergate’s collapse.

A 2023 review by the Federal Reserve Board’s Office of Inspector General cited the bank’s dependence on crypto-related deposits, rapid growth and multiple layers of funding risk. It also identified significant weaknesses in corporate governance and risk management and concluded that regulators could have responded more aggressively.

The findings therefore placed greater emphasis on Silvergate’s business concentration and internal risk controls than Lane’s political-pressure explanation.

AML Dispute Remains Central to Silvergate Case

Lane also rejected the suggestion that regulators had established a failure of Silvergate’s anti-money laundering controls.

That position conflicts with subsequent enforcement actions.

In July 2024, the US Securities and Exchange Commission charged Silvergate Capital, Lane and former Chief Risk Officer Kathleen Fraher with misleading investors about the bank’s AML program and monitoring of cryptocurrency customers.

The SEC alleged that Silvergate’s automated monitoring system failed to monitor more than $1 trillion in transactions and that the bank failed to identify nearly $9 billion in suspicious transfers involving FTX entities.

Lane settled the SEC allegations without admitting or denying them. He agreed to pay a $1 million penalty and accept a five-year bar from serving as an officer or director.

Separately, the Federal Reserve imposed a $43 million penalty on Silvergate over deficiencies in transaction monitoring.

Crypto Banking Pressure Intensified in 2023

Lane also pointed to interagency statements issued in early 2023 as evidence that regulators were putting pressure on banks involved with cryptocurrency.

The statements urged financial institutions to take a cautious approach toward crypto-related activities, although the Federal Reserve explicitly said banks were neither prohibited nor discouraged from serving any particular customer category.

The regulatory position later shifted further. In April 2025, US agencies withdrew the earlier crypto-risk statements.

For Silvergate, however, the regulatory scrutiny came after the bank had already experienced a dramatic deterioration in crypto deposits and liquidity conditions.

Outlook

The competing explanations for Silvergate’s wind-down reflect a broader dispute over the relationship between US regulators and the crypto industry. Lane’s account emphasizes political pressure and the bank’s ability to meet withdrawals, while federal reviews and enforcement actions highlight structural concentration, governance, risk management and transaction-monitoring weaknesses. The distinction remains important as policymakers continue debating how aggressively banks should manage exposure to digital assets without effectively cutting the industry off from traditional financial infrastructure.