Former CEO of Silvergate says Biden administration pressure pushed the bank to close business in 202

Former Silvergate Bank CEO: Voluntary liquidations in 2023 stem more from political pressure than solvency issues.

Alan Lane, former CEO of Silvergate Bank, pointed out in a Substack launch article released on Tuesday that the bank's voluntary liquidations in 2023 are not driven mainly by solvency concerns, but are influenced by political pressure related to the Biden administration. Lane believes that despite multiple regulatory review reports highlighting funding, governance and compliance failures, Silvergate could have continued to operate after meeting large withdrawal needs at the end of 2022.

The controversy goes beyond the Silvergate collapse itself, as it is at the center of a broader and ongoing debate: whether U.S. regulators have effectively squeezed cryptocurrency-focused banks through risk management reviews and oversight actions, or whether these failures were mainly due to internal reasons. Lane's account adds a first-hand perspective to a record that includes enforcement actions by the Federal Reserve and the Securities and Exchange Commission, as well as official reviews that highlighted the bank's weaknesses in managing its centralized deposit base and compliance obligations.

Core Points

• Lane claims that Silvergate remains solvent during periods of large withdrawals, citing liquid assets that can be sold or pledged as a basis.
• Lane attributed the liquidation decision in 2023 to "political pressure," while the Fed's review highlighted financing risks and shortcomings in governance and compliance.
• A 2023 review report by the Federal Reserve's Office of the Inspector General linked Silvergate's collapse to its reliance on cryptocurrency depositors and multi-layered financing risks.
• In July 2024, the SEC charged Silvergate Capital, Lane and former risk control officer Kathleen Fraher with shortcomings in anti-money laundering (AML)-related monitoring and investor disclosures.
• Although government agencies later withdrew their oversight statements on cryptocurrency risks in early 2023, enforcement actions by regulators continue to play a role in post-mortem analysis.

Lane argues that Silvergate can withstand the wave of withdrawals

Lane's core proposition is that Silvergate's failure was not due to a lack of liquidity or capital to maintain operations. He wrote in the article that the bank was still able to continue to operate after meeting withdrawal needs equivalent to 70% of its demand deposits. These withdrawals occurred in the fourth quarter of 2022.

Lane pointed out in her post that liquidation became the path of least resistance only after political pressure intensified. He described it as a "coordinated attack by the Biden administration" and said it was the reason Silvergate chose to liquidate under political pressure.

Lane also pointed to the bank's reserve and balance sheet operations during the period. In a January 2023 business update, Silvergate reported that digital asset deposits fell from $11.9 billion to $3.8 billion, a drop of 68%. The bank said it sold $5.2 billion in debt securities and recorded a loss of $718 million, while reporting year-end cash and equivalents of $4.6 billion. Lane's argument relies on this picture-that liquid assets are available and outflows do not automatically mean insolvency.

Even if we accept Lane's framework on liquidity, regulators will have very different accounts of what ultimately leads to liquidation. Lane raised solvency and strategic arguments; multiple oversight findings highlighted risk concentrations, rapidly changing financing dynamics, and compliance and governance issues.

Regulators 'assessments focus on concentration, governance and risk control

A September 2023 review report by the Federal Reserve Board's Office of the Inspector General examined Silvergate's failure, pointing out that the bank's heavy reliance on cryptocurrency depositors, rapid growth and multiple layers of financing risks were key drivers of liquidation decisions. The report also highlighted weaknesses in corporate governance and risk management and recommended that inspectors could have taken more proactive and decisive action.

Lane's Substack post refuted the compliance narrative. He said no regulator had proven Silvergate's anti-money laundering (AML) controls had failed. This statement contradicts subsequent enforcement actions by the SEC, which specifically investigated AML monitoring practices and related disclosures.

For investors, this difference is not just rhetorical. If regulators 'conclusions mainly reflect a failure of internal controls, then the industry's opportunities to enter the banking industry may be largely limited by compliance performance. Conversely, if supervisory pressure is the decisive factor, the risk perspective of lenders and cryptocurrency companies may shift to how regulators manage risk tolerance at the institutional level, rather than how companies perform monitoring and governance.

SEC Enforcement and Anti-Money Laundering Monitoring Charges

Lane's narrative is also intertwined with the SEC's July 2024 allegations. According to an SEC press release at the time, the agency accused Silvergate Capital, Alan Lane and former chief risk officer Kathleen Fraher of having problems misleading investors about the bank's AML plans and monitoring of cryptocurrency customers.

In the SEC's allegations, Silvergate's automated systems failed to monitor transactions worth more than $1 trillion, and the bank allegedly failed to detect nearly $9 billion in suspicious transfers involving FTX entities.

Lane subsequently settled the SEC case without admitting or denying the charges. The SEC reported that the settlement included a $1 million fine and a five-year injunction for officials and directors. In addition, according to a Federal Reserve enforcement press release issued on July 1, 2024, the Federal Reserve fined Silvergate US$43 million for shortcomings in transaction monitoring.

Taken together, these actions support the core view of regulators 'post-mortem analysis: Even if deposit withdrawals accelerated pressure, regulators believed that the bank's monitoring and governance stance prevented it from achieving stability.

Is the industry facing supervision "pressure"? The withdrawn statement

Lane also cited a multi-sector cryptocurrency risk statement in early 2023 as evidence of pressure on the entire industry. The Federal Reserve's regulatory materials describe guidelines urging banks to be cautious about cryptocurrency-related activities. The Fed also said that based solely on the guidelines, institutions were not prohibited or discouraged from serving specific customer groups.

However, this incident did not last permanently. According to the Federal Reserve's press release on the withdrawal, the government agency withdrew its earlier statement in April 2025.

This timeline is crucial for important readers trying to weigh Lane's claims against its regulatory record. The supervisory stance in early 2023 may have influenced the way banks manage cryptocurrency-related risks; subsequent withdrawals suggest the agency has finally reassessed the way the guidelines are expressed. Still, SEC and Fed actions related to Silvergate's own monitoring and risk control remain part of the enforcement context-a sign that regardless of broader pressures, regulators have also found Silvergate's operational failures.

Future outlook on the "Regulation vs. Solvency" issue

Lane's Substack post could exacerbate the divide between those who see Silvergate's liquidation as a response to external political and supervisory pressure, and those who see it as a logical end point for internal risk concentration and control failure. The key question now is whether further documents or procedures will clarify which factors play a decisive role in clearing-and how cryptocurrency-focused lenders will interpret regulators 'changing guidelines over time.