An investigation into Silvergate Bank found that its collapse was brought about by a dependency on crypto deposits and “ineffective” senior management.
Fed Report: Silvergate Bank Got Fatally Ensnared in Crypto While Examiners Shrugged
Silvergate Bank transformed from a community lender to a high-flying crypto bank without its Federal Reserve examiners raising an alarm, according to a report from the Federal Reserve’s Office of Inspector General (OIG), allowing the bank to take risks that would turn fatal.
Tether adds Bahamas-based private bank Britannia as partner: Report
Tether’s reported new partnership with Britannia Bank makes it the third Bahamas-based bank to join forces with the stablecoin issuer.
Executives Of Crypto-Friendly Bank Silvergate Step Down As Lawsuits, Liquidation Rages On
In a recent turn of events, multiple executives of the embattled California-based cryptocurrency bank Silvergate Capital have announced that they will be stepping away from their roles at the bank.
The announcement comes as the bank remains deep in the throes of liquidation while battling multiple lawsuits linked to its demise.
Top Executives Set to Step Down
Silvergate Capital Corp announced on Tuesday, August 16, the departure of some of its primary employees working in executive leadership positions in its company. The executives leaving include Chief Financial Officer, Antonia Martino, Chief Legal Officer, John Bonino, and CEO, Alan Lane.
Lane and the company’s Chief Legal Officer will be departing on Tuesday, August 16, and according to a financial filing delivered to the United States Securities and Exchange Commission (SEC), Silvergate’s Chief Legal Officer is set to step down on September 30.
The executives’ decision to depart from Silvergate follows the bank’s announcement in March to shut down operations and liquidate its assets. Lane has served as the CEO of Silver Capital Corp and Silvergate Bank since 2008 and played a pivotal role in Silvergate’s development and growth.
In the absence of a CEO, Silvergate has replaced Lane with Silvergate’s Chief Transition Officer, Kathleen M. Fraher. It has also made Andrew Surry, Silvergate’s Accounting Officer, the principal financial offer in the absence of Martino.
Silvergate stated in the filing to the SEC that it will provide each executive severance benefits previously offered to employees laid off through the bank’s liquidation process.
Earlier this year in January, Silvergate laid off over 180 employees, cutting its workforce by 40%. Again, in May, the bank laid off over 250 workers, leaving a group of about 80 to oversee its liquidation and termination process.
The San-Diego-based bank said in a report that it plans to significantly reduce the number of employees in its company and manage its operations using a skeleton crew.
Silvergate Enveloped in Lawsuits and Liquidations
In November 2022, Silvergate collapsed following the FTX failure and embroilment in fraud. Silvergate, which served as one of the two major banks for cryptocurrency companies in the industry, decided to officially shut down all operations and start a liquidation process.
As a result, stocks plunged by 36% and the bank suffered massive customer withdrawals. Toward the end of Q3, Silvergate’s total deposits from crypto customers plummeted by 68%, declining to $3.8 billion from an astonishing $11.9 billion.
According to reports, FTX was one of Silvergate’s major customers and it was revealed that Silvergate held about $1 billion in deposits from FTX at the time of its failure. Silvergate’s affiliation with FTX has caused severe financial damage to the bank’s reputation and put it on the radar of the regulatory authorities in the United States.
Silvergate was also mentioned in multiple lawsuits due to its association with the bankrupt FTX and allegations of participation in FTX’s fraudulent activities.
Warren’s alleged work with short-seller shows anti-crypto army heating up
Elizabeth Warren reportedly took advice from Wall Street short-seller Marc Cohodes, who cashed in on the collapse of Silvergate and Signature banks.
Stablecoins are a critical countermeasure to Operation Chokepoint
Stablecoins could help crypto firms to remove themselves from the banking system — and prevent the U.S. government from cutting off their financial lifelines.
Silvergate begins NYSE delisting process as it readies to cut 230 staff
The parent company of the defunct Silvergate Bank disclosed significant staff cuts and the delisting of its securities in an SEC filing.
The Short-Sightedness of Run-Amok Regulators
Ric Edelman, founder of the Digital Assets Council of Financial Professionals, talks about a key reason why crypto’s future looks bleaker: an apparent effort to cut it off from U.S. banks.
U.S. Bank Regulators Investigating Leaders of the Failed Tech Banks
The Federal Deposit Insurance Corp. is investigating the actions of the leaders of Signature Bank and Silicon Valley Bank to hold them accountable for their collapses, said Chairman Martin Gruenberg, who detailed their mismanagement and dangerous business concentrations – especially in digital assets at Signature – in testimony prepared for a U.S. Senate hearing.
Bank Consolidation Threatens Freedom, Makes Case for Bitcoin
The biggest threat from the banking crisis triggered by this month’s collapse of Silicon Valley Bank might not lie in the potential for depositors to lose their savings but in the censorship power that massive banks are now accumulating as customers move their money.
Crypto Is the Solution to Bank Runs, Not the Cause
Self-custody, transparency and immediate settlement are just a few ways that crypto could prevent loss of funds.
Bitcoin Emerges as Safe Haven as Traditional Finance Faces Turmoil
Conflicting data creates the question of how the Fed will react to both rising inflation and failing banks – and whether bitcoin will be a lifeboat.
Looking at Some Unanswered Signature and Silvergate Bank Questions
It seems the crypto industry still has some questions about Signature and Silvergate’s shutdowns.
No Crypto Banking Port Has Really Opened Up in This U.S. Storm
The biggest U.S. banks have not stepped forward to welcome homeless crypto businesses scrambling for banking services after fleeing the wreckage of Silvergate Bank, Signature Bank and Silicon Valley Bank.
Fed, central banks enhance ‘swap lines’ to combat banking crisis
Currency swap lines have been used during times of crisis in the past, such as the 2008 global financial crisis and the 2020 coronavirus pandemic.
U.S. Banking Cutoff Presents Opportunities for Crypto in Europe
U.S policymakers seem to be doing their best to suffocate dollar on-ramps into crypto, leaving the door open for other mature markets to gain a competitive edge.
This Crisis Will Define the Future of Money
The recent collapse of three high-profile banks – Silicon Valley Bank, Silvergate Bank and Signature Bank – has caused worrying outflows at hundreds of regional banks. Now, with the U.S. Federal Reserve creating a new backstop facility reportedly worth $2 trillion and Switzerland’s central bank bailing out Credit Suisse to the tune of $54 billion, the echoes of prior crisis in 2008 and 2013 are loud.
How credible is the ‘Operation Chokepoint’ theory?
Silicon Valley Bank and Silvergate Bank were crucial to many in the cryptocurrency industry, and it’s fueling theories that regulators encouraged their downfall.
How credible is the ‘Operation Chokepoint’ theory?
Silicon Valley Bank and Silvergate Bank were crucial to many in the cryptocurrency industry, and it’s fueling theories that regulators encouraged their downfall.
Bitcoin Is a Clear Winner of the U.S. Banking Crisis
The narratives around bank failures, stablecoins and interest rate hikes seem strong enough to propel the price of bitcoin, says CoinDesk’s George Kaloudis.
