Former Silvergate CEO Alan Lane stated that the bank paid out withdrawals equivalent to 70% of demand deposits within weeks in Q4 2022, claiming that no other bank in the U.S. has survived a similar scale of run while maintaining solvency.

He noted that deposits once exceeded $14 billion, almost entirely from business clients in the crypto industry; the flagship product, the Silvergate Exchange Network, allowed clients to transfer USD around the clock. After platforms like FTX went bankrupt, digital asset deposits fell from about $11.9 billion at the end of Q3 to about $3.8 billion by year-end. To cope with the outflows, the bank initially used wholesale financing and then sold about $5.2 billion in bonds, recognizing a loss of about $700 million, with year-end cash around $4.6 billion, still above the then digital asset deposits.

Lane stated that the bank borrowed against fully collateralized, marked-to-market assets and did not utilize the bank's term financing program launched in March 2023; he emphasized that business concentration does not equate to a lack of risk management and that high-quality liquid assets were used to address volatility. He attributed subsequent pressures to investigations by the Biden administration and federal agencies, as well as policies limiting banking services to the crypto industry, stating that the orderly liquidation on March 8, 2023, was a voluntary end to operations, not due to insolvency or cash depletion.

Public regulatory records coexist with his narrative: The Federal Reserve's Office of Inspector General reviewed in 2023 that the liquidation was attributed to deposit concentration, rapid expansion, funding structure risks, and weaknesses in governance and risk control. In July 2024, the Federal Reserve and California regulators identified flaws in transaction monitoring and anti-money laundering controls, leading Silvergate Capital to agree to pay tens of millions in fines; the SEC charged the bank and executives with misleading investors regarding client monitoring, with Lane settling without admitting or denying the charges, paying $1 million and accepting a five-year ban from serving as an executive or director.

Deposits were ultimately repaid without the intervention of the FDIC. After the closure of the SEN network, crypto firms lost a 24/7 USD transfer channel, leading more institutions to turn to other banking channels or trust licenses.

Mechanically, this is a repricing of regulation and narrative: Lane framed the event as "surviving a run only to be cleared out by policy," while regulators framed it as a failure of concentration and compliance. Beneficiaries are custodial banks that later obtained federal trust or more diversified deposit structures; those under pressure are trading platforms that tied USD clearing to a single crypto-friendly bank. Funds migrated from SEN's instant clearing to alternative channels that could satisfy both banking regulations and on-chain settlements.

Lane's article redefined the March 8, 2023, liquidation as a proactive exit under political pressure, existing alongside the regional bank run at the same time and subsequent federal penalties.

Source: Public Information