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Silvergate Capital CEO Alan Lane has slammed \u201cshort sellers\u201d and \u201cother opportunists\u201d for spreading misinformation over the last few weeks \u2014 just to score themselves a quick buck.\u00a0<\/p>\n
In a Dec. 5 public letter<\/a>, Lane said there was \u201cplenty of speculation \u2013 and misinformation\u201d being spread by these parties to \u201ccapitalize on market uncertainty\u201d caused in part to FTX\u2019s catastrophic collapse<\/a> in November.<\/p>\n His crypto-focused bank was recently forced to deny<\/a> one of these so-called FUD (fear, uncertainty and doubt) campaigns last week when there was speculation that the firm was exposed to the bankrupt crypto lender BlockFi. <\/p>\n Lane also used the latest letter to the public as an \u201copportunity to set the record straight\u201d about its investment relationship with FTX, as well as the company\u2019s \u201crobust risk management approach.\u201d<\/p>\n \u201cSilvergate conducted significant due diligence on FTX and its related entities, including Alameda Research, both during the onboarding process and through ongoing monitoring, in accordance with our risk management policies and procedures.\u201d Read more here: https:\/\/t.co\/9nAViJOzoi<\/a><\/p>\n \u2014 Silvergate Bank (@silvergatebank) December 5, 2022<\/a><\/p><\/blockquote>\n Lane reiterated that the firm complies with the Bank Secrecy Act and the USA PATRIOT Act, which requires it to monitor and scrutinize \u201ceach and every account,\u201d including FTX and Alameda research. <\/p>\n \u201cSilvergate conducted significant due diligence on FTX and its related entities including Alameda Research, both during the onboarding process and through ongoing monitoring,\u201d the CEO explained. <\/p>\n The CEO has also touted the firm\u2019s \u201cresilient balance sheet and ample liquidity\u201d adding that customers\u2019 deposits are \u201csafely held.\u201d <\/p>\n \u201cIn addition to the cash we carry on our balance sheet, our entire investment securities portfolio can be pledged for borrowings at the Federal Home Loan Bank, other financial institutions, and the Federal Reserve Discount Window \u2013 and can ultimately be sold should we need to generate liquidity to satisfy customer withdrawal request,\u201d explained Lane. <\/p>\n Related: <\/em><\/strong>Block.one and its CEO become largest Silvergate Capital shareholders<\/em><\/strong><\/a><\/p>\n Silvergate has also been the focus of other speculation in recent weeks, including CFA-issued accountant and former portfolio manager Genevieve Roch-Decter, who expressed<\/a> doubt in a Dec. 1 post whether Silvergate could maintain its liquidity position and pondered whether it could suffer from its close relationship with FTX. <\/p>\n Roch-Decter was also concerned with Silvergate\u2019s Bitcoin-collateralized loan position, which could impact the firm\u2019s balance sheet if Bitcoin\u2019s (BTC) price continues to fall. <\/p>\n She also expressed worry that should the firm\u2019s Silvergate Exchange Network \u2014 a network used by highly used crypto exchanges to send U.S. dollars and Euros between accounts \u2014 was compromised, it could \u201cdrag down the entire system.\u201d<\/p>\n The Silvergate Exchange Network enables the bank\u2019s digital currency and institutional investor clients to send U.S. dollars and euros between their Silvergate accounts and the accounts of other Silvergate clients.<\/p>\n Here\u2019s a graphic the company shared in February: pic.twitter.com\/RKGLq1ZTSg<\/a><\/p>\n \u2014 Genevieve Roch-Decter, CFA (@GRDecter) November 30, 2022<\/a><\/p><\/blockquote>\n Lane confirmed in the statement that Silvergate \u201ccustomers continue to have access to their U.S. dollar deposits when they need them and that Silvergate Exchange Network (SEN) has continued to operate uninterrupted throughout this period.\u201d<\/p>\n \u201cWe intentionally carry cash and securities in excess of our digital asset-related deposit liabilities,\u201d the CEO added.<\/p>\n Lane\u2019s public letter did little to stem the bleeding of Silvergate\u2019s (SI) share price, which fell 8.49% to $24.24 on the New York Stock Exchange (NYSE) on Monday, according<\/a> to MarketWatch.<\/p>\n Silvergate\u2019s stock is now down 52.43% over the last thirty days and decreased 85.34% over the last 12 months.<\/p>\n<\/div>\n\n
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