Former Silvergate CTO said the bank was stabbed behind by regulators in 2023

Odaily Planet Daily News Silvergate Bank former Chief Technology Officer Chris Lane published his 'personal opinion' on X, accusing the regulatory authorities of implementing a 'bait and switch' on this bank, which was once favored by many in the encryption industry. Silvergate Bank voluntarily closed and liquidated in March 2023 as part of a regional bank crisis sweeping the United States, leading to the collapse of three mid-sized banks (Silvergate, Silicon Valley Bank, and Signature Bank) within just five days. The company stated in a filing with the U.S. SEC at the time: "Given recent industry and regulatory developments, Silvergate believes that orderly closure of its banking operations and voluntary liquidation of the bank is the best path forward."

However, since the bank closed, several executives have explicitly blamed the sudden shift of regulatory authorities for ultimately preventing Silvergate Bank from continuing its digital asset-centric business model. Lane wrote:"Silvergate has become the object of its service to Cryptocurrency clients, a strategic vertical that we have been following since 2013. Regulators intervened at some point in the spring of 2023, strictly limiting the amount of US dollar deposits we can hold for digital asset clients, directly impacting our entire business model." Several influential figures in Washington have attributed the turmoil in the cryptocurrency industry, particularly after the collapse of FTX, to the collapse of Silvergate. Silvergate had provided some banking services to the exchange, which filed for bankruptcy in November 2022. 'The collapse of Silvergate Bank, the preferred bank of cryptocurrency, is disappointing but also foreseeable,' US Senator Elizabeth Warren wrote on X when Silvergate collapsed. 'I warned that Silvergate's behavior was dangerous, if not illegal, and discovered serious due diligence failures. Now, customer losses must be compensated, and regulators should strengthen their oversight of cryptocurrency risks.' However, Lane defended Silvergate's solvency in his post after FTX's closure, "Our business is not perfect, we do provide banking services to FTX, just like many other banks. But Silvergate has the ability to pay, Liquid (I believe) was stabbed in the back by our regulators." Some figures in the encryption field claim that the coordinated action taken by regulators to restrict the entry of the digital asset industry into US banks can be considered as "Operation Choke Point 2.0", an evolution of the Department of Justice's 2013 investigation into banks serving certain high-risk or suspicious financial enterprises (such as payday loan companies). (The Block) In a message yesterday, David Sacks, the incoming AI and 'encryption czar' of the Trump administration, said, 'There are too many stories of people being harmed by Operation Choke Point 2.0,' and stated that the so-called measure 'needs to be reviewed.'