Foundation and growth Silvergate Bank was founded as a
savings and loan association. Silvergate became a California-chartered bank in 1988. In 2013, CEO Alan Lane personally invested in
Bitcoin; the company launched an initiative to start serving
cryptocurrency clients in 2016. After this, the bank grew rapidly, reaching $1.9 billion in assets and 250 clients by 2017. Silvergate was probably the first regulated bank to develop this sort of payment system. It was ready to test its Diem stablecoin in the spring of 2021, and on the brink of approval from the
Swiss Financial Market Supervisory Authority (Finma). However, the final approval needed by the
US Treasury was refused, with the
Biden administration requesting a delay to examine the project further. Writes
The Financial Times, Libra's head of policy,
Dante Disparte "quit in frustration." Silvergate Bank partnered with the
Diem Association in May 2021 to launch their stablecoin, with Silvergate to be issuer and reserve manager. Silvergate Capital, Silvergate Bank's holding company, purchased Diem's technology assets on January 31, 2022 for $182 million. At the time, Silvergate CEO was Alan Lane. As of late 2022, the stablecoin had not yet launched. By the start of 2023, however, the bank announced it had shelved any plan to launch its own stablecoin, and had recorded a $196 million loss related to its write-off of Diem assets.
FTX exposure, drop in liquidity, and winding down In March 2022, Silvergate invested in a $200 million fundraising round for
Aptos, a cryptocurrency startup founded by ex-Diem employees. In the first part of 2022, Silvergate made a $205 million loan to the analytics software company
Microstrategy, which used the funds to buy bitcoin. By November 2022, the bank was led by Lane as CEO and Ben Reynolds as president, while Eisele remained in the leadership as chief credit officer. Some
short sellers raised the prospect of a
bank run. By December 2022 deposits at Silvergate had fallen to $3.8 billion.
Liquidation On March 8, 2023, it was announced that Silvergate Bank would wind down its operations and liquidate. As of November 2023, all deposits had been repaid, with banking operations ceasing shortly after that.
Investigations and settlements The
Federal Reserve Board and
California Department of Financial Protection and Innovation (DFPI) on July 1, 2024, stated that its joint investigation against Silvergate had found deficiencies in the bank's internal transaction monitoring, and Silvergate would be paying out a combined $63 million in penalties to the agencies. An SEC penalty was levied separately from the $63 million, and also on July 1, the SEC announced it had charged Silvergate Capital Corporation for allegedly misleading investors about the strength of its anti-money laundering compliance program, noting it had failed to detect what the SEC called "nearly $9 billion in suspicious transfers among FTX and its related entities." Silvergate settled without admitting to or denying the allegations, paying $50 million to the SEC. Silvergate stated the settlement concluded investigations by the Federal Reserve, DFPI, and SEC. Also, Silvergate said it was surrendering its bank charter. On September 18, 2024, Silvergate Capital filed for
Chapter 11 bankruptcy protection, listing assets between $100 million and $500 million and liabilities between $10 million and $50 million. In April 2025, the
Wall Street Journal reported that following a request from an activist shareholders, an examiner had been appointed to look into an investigation conducted by a director, concluding it had been tainted by the use of the company's own law firm. ==References==