Silvergate ex-CEO Alan Lane blames Biden administration pressure for 2023 wind-down

Former Silvergate Bank CEO Alan Lane is now arguing that the crypto lender’s 2023 wind-down was driven by political and regulatory pressure from the Biden administration, not by insolvency. For high-risk PSPs, the practical question is familiar: when a bank says it is exiting the sector “voluntarily,” how much of that choice is really commercial, and how much is regulatory gravity?

1. In an inaugural Substack post on Tuesday, Lane said Silvergate could have kept operating after meeting withdrawals equal to 70% of its demand deposits during the fourth quarter of 2022. He said the bank still had liquid assets it could sell or pledge as collateral, and that liquidation happened “in the face of political pressure,” which he described as a “coordinated attack by the Biden Administration.”
2. Silvergate’s own January 2023 business update showed how severe the run had become: digital asset deposits fell 68% from $11.9 billion to $3.8 billion during the quarter. The bank sold $5.2 billion of debt securities and recorded a $718 million loss, while saying it held $4.6 billion in cash and equivalents at year-end.
3. Lane’s version of events adds a firsthand claim to the wider debate over whether US agencies were trying to restrict crypto firms’ access to banking. That said, it conflicts with federal findings that pointed to Silvergate’s concentrated deposit base, funding risks, and governance and compliance weaknesses as the drivers of its liquidation.
4. A September 2023 review by the Federal Reserve Board’s Office of Inspector General said Silvergate’s dependence on crypto depositors, rapid growth, and multilayered funding risks led to its liquidation. The review also cited significant weaknesses in corporate governance and risk management, and said examiners could have acted more aggressively and decisively.
5. Lane said no regulator had proven that Silvergate’s anti-money laundering (AML) controls failed. But in July 2024, the Securities and Exchange Commission (SEC) charged 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 SEC 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.

Lane settled the SEC’s charges without admitting or denying the allegations, agreeing to a $1 million penalty and a five-year officer-and-director bar. Separately, the Federal Reserve fined Silvergate $43 million over transaction-monitoring deficiencies. Lane also pointed to interagency crypto-risk statements issued in early 2023; those statements urged 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 withdrew the statements.