Silvergate CEO Departs With Benefits as Bank Shutdown Continues
Silvergate CEO Alan Lane and Chief Legal Officer John Bonino left the company on Tuesday as the firm, once known for its crypto-friendly bank, continues to wind down operations.
Their departures from the California-based company—which entered into voluntary liquidation in March—are effective immediately and represent the latest phase of the shutdown process, according to a filing with the Securities and Exchange Commission.
The notice also states that Silvergate’s Chief Financial Officer Antonio Martino will depart on Sept. 30. While the three executives won’t be entitled to further compensation once they’re gone, they “will receive certain severance benefits.”
The top-level departures at Silvergate come after the firm’s headcount was slimmed down to a skeleton crew in May, where 230 of the firm’s workers were shown the exit. Silvergate Bank once catered to some of crypto’s biggest players, including Coinbase and Gemini, but its wind down has been the firm’s preeminent priority for months.
The principal executive officer left at Silvergate will be Kathleen Fraher, who was listed as Silvergate’s chief transition officer in the filing. Her LinkedIn profile shows she has served as the bank’s chief risk officer for 17 years.
Silvergate did not immediately respond to a request for comment from Decrypt.
Silvergate’s move to shutter in March was followed by the failures of Silicon Valley Bank (SVB) and Signature Bank, also viewed as crypto-friendly banks.
Silvergate’s instant settlement platform, SEN, was a staple of its business and was used heavily by institutional crypto clients that conducted around-the-clock transfers. The Federal Deposit Insurance Corporation highlighted the risk of serving multiple crypto clients at once in a report on Monday, saying the practice can introduce liquidity risks.
Silvergate’s troubles became apparent when it divulged that users yanked $8.1 billion in crypto deposits in the final fiscal quarter of last year. It was the same period that the cryptocurrency exchange FTX went under and rattled the market for digital assets.
To weather a flurry of withdrawals, the company tapped the Federal Home Loan Bank (FHLB) for a $4.3 billion loan and sold around $5.2 billion in debt securities. It was the former action that drew the ire of several U.S. Senators.
Senator Elizabeth Warren (D-MA) was among a bipartisan group of lawmakers that called out Lane in a letter. They scrutinized the bank’s link to FTX and accused his company of “further introduc[ing] crypto market risk into the traditional banking system.”