Silvergate

Silvergate’s banking business originated with Silvergate Bank, which opened in 1988 and was historically headquartered in La Jolla, California, United States. Silvergate Capital Corporation is its parent company and once held the bank as a registered bank holding company; the two are separate legal entities.⁠[1]

Alan Lane joined Silvergate in December 2008, serving as the bank’s chief executive officer, among other roles. His earlier career spanned several banks and financial services companies. During his tenure, Silvergate gradually developed its banking business serving digital asset companies.⁠[2][3]

In 2013, Silvergate began studying the opportunity to provide banking services to bitcoin-related companies, and in 2014 it established deposit relationships with digital asset clients. Its entry point was the U.S. dollar accounts companies need for day-to-day operations: some startups that had already raised venture capital struggled to find banks willing to open accounts for them.⁠[4]

The Silvergate Exchange Network (SEN) was established in 2017, allowing clients to make instant transfers around the clock between their respective Silvergate U.S. dollar accounts. The platform also offered an API that institutional clients could use to integrate transfers, balance inquiries, and reconciliation into their own systems; the transactions involved U.S. dollar funds held in bank accounts.⁠[5][3]

The business used payment services to attract deposits from digital asset companies, which the bank then deployed into assets such as interest-earning deposits, securities, and loans. Because digital asset markets trade continuously all year, SEN provided an arrangement for moving U.S. dollar funds between exchanges and institutions that differed from traditional banking hours.⁠[3]

Silvergate Capital’s common stock began trading on the New York Stock Exchange on November 7, 2019, under the symbol SI, and the company announced the completion of its initial public offering on November 12. The offering was priced at $12 per share, with about 3.33 million shares offered, of which about 0.82 million were issued by the company and the rest sold by existing shareholders.⁠[1]

Silvergate launched SEN Leverage, enabling eligible clients to obtain U.S. dollar loans using bitcoin as collateral, with funding and repayment available around the clock through SEN. The first partner, Bitstamp, acted as the bank’s agent in custodying and managing the bitcoin collateral. The product added a lending business alongside the payment network.⁠[5]

Silvergate Capital acquired the intellectual property of Diem’s payment network and other technology assets, paying about 1.22 million shares of Class A common stock and $50 million in cash, for total consideration of about $182 million based on the share price on the announcement date. The company planned to use the technology for blockchain payments and stablecoin business; the transaction was an asset purchase and did not represent the formal issuance of a stablecoin.⁠[6]

During the digital asset industry crisis in the fourth quarter of 2022, Silvergate faced large-scale withdrawals. Preliminary financial disclosures on January 5, 2023, showed that deposits from digital asset clients fell from $11.9 billion at the end of September 2022 to $3.8 billion at year-end. To adjust its liquidity, the company sold $5.2 billion of debt securities during the quarter, with losses of $718 million on the sale of securities and related derivatives.⁠[7]

The company also announced a reduction of about 200 employees, roughly 40% of its workforce, and an impairment charge of $196 million on the technology assets acquired from Diem, saying its blockchain payment solution was no longer imminent. These figures were the preliminary financial and business adjustment figures released at the time.⁠[7]

On March 3, Silvergate announced that it was discontinuing SEN. On March 8, the parent company announced its intent to wind down Silvergate Bank’s operations in an orderly manner and voluntarily liquidate it, planning full repayment of client deposits while considering how to resolve claims and preserve its technology and tax assets. The bank’s liquidation and the parent company’s later Chapter 11 filing took place at different times.⁠[8][9]

As the bank’s liquidation proceeded, Alan Lane stepped down as president and chief executive officer of the parent company and as chief executive officer of the bank. Kathleen Fraher, as interim head, assumed the principal executive officer responsibilities in the parent company’s securities reporting. The company said at the time that, in light of the liquidation plan, it did not intend to appoint a new bank chief executive officer for now.⁠[10]

A public review summary by the Office of Inspector General for the Federal Reserve and the Consumer Financial Protection Bureau found that Silvergate’s clients were concentrated in the crypto industry, that it expanded rapidly with deposits that were almost entirely non-interest-bearing and not covered by deposit insurance, and that these factors were compounded by governance and risk management weaknesses. The review also found shortcomings on the part of supervisors in reviewing the new business model, acting in a timely manner, and providing guidance for supervising rapidly growing banks.⁠[11]

On July 1, the Federal Reserve fined Silvergate Capital and the bank $43 million over deficiencies in transaction monitoring and anti-money laundering compliance, with federal and California regulatory penalties totaling $63 million. The SEC charged the company and some former executives on the same day with making misleading statements about the state of its compliance; the company agreed to settle without admitting or denying the allegations, and the $50 million SEC penalty could be offset by penalties paid to bank regulators.⁠[12][13]

On July 26, the Federal Reserve confirmed that the bank had completed its liquidation, repaid all client deposits, and no longer operated a banking business, and terminated the May 2023 enforcement action related to the liquidation arrangements. This termination concerned that specific supervisory measure.⁠[14]

Silvergate Capital Corporation and two affiliated debtors filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware. The affiliated debtors were Silvergate Liquidation Corporation and Spring Valley Lots, LLC. The banking business had already been exited, and the subsequent proceedings dealt with the company’s reorganization and its assets and claims.⁠[9][14]

The U.S. District Court for the Southern District of California approved a $37.5 million cash settlement of the Silvergate securities class action. The suit concerned securities disclosures about customer vetting, due diligence, and monitoring, and covered eligible common stock investors and purchasers in related 2021 securities offerings. After deduction of court-approved fees and other items, the settlement funds are handled under the plan of allocation; approval of the settlement does not mean that all investors have received payment.⁠[15]

The bankruptcy court confirmed the Chapter 11 plan on November 13, 2025, and the plan took effect on March 31, 2026, completing Silvergate Capital’s bankruptcy reorganization. A new board of directors took office the same day, with Daniel Unkovic as executive chairman and Stephen Gustin as chief executive officer.⁠[9][16]

On August 5, Stilwell Group and Exploration Capital (X-Cap) each invested $1.5 million, for a total of $3 million, to subscribe for newly issued common stock of the company. On August 18, the company’s stock moved from the OTC Expert Market to the Pink Limited Market.⁠[16]

The reorganized company retains SEN, Diem-related intellectual property, the benefit of tax loss carryforwards, and certain potential legal claims, and plans to study their future value. The August 2026 shareholder letter listed these matters as areas of exploration, which does not establish that the bank or SEN services have resumed.⁠[16][14]

Alan Lane published “Silvergate’s Voluntary Liquidation,” arguing that the bank remained solvent after withstanding concentrated withdrawals in late 2022 and attributing its 2023 shutdown to political and regulatory pressure during the Biden administration. This is the former executive’s explanation of the reasons for the liquidation; the 2023 supervisory review emphasized deposit concentration, funding structure, and governance risks.⁠[17][11]