Silvergate Capital CEO Alan Lane has slammed “quick sellers” and “different opportunists” for spreading misinformation over the previous few weeks — simply to attain themselves a fast buck.
In a Dec. 5 public letter, Lane stated there was “loads of hypothesis – and misinformation” being unfold by these events to “capitalize on market uncertainty” brought about partly to FTX’s catastrophic collapse in November.
His crypto-focused financial institution was not too long ago compelled to disclaim considered one of these so-called FUD (concern, uncertainty and doubt) campaigns final week when there was hypothesis that the agency was uncovered to the bankrupt crypto lender BlockFi.
Lane additionally used the newest letter to the general public as an “alternative to set the report straight” about its funding relationship with FTX, in addition to the corporate’s “strong danger administration method.”
“Silvergate performed important due diligence on FTX and its associated entities, together with Alameda Analysis, each throughout the onboarding course of and thru ongoing monitoring, in accordance with our danger administration insurance policies and procedures.” Learn extra right here: https://t.co/9nAViJOzoi
— Silvergate Financial institution (@silvergatebank) December 5, 2022
Lane reiterated that the agency complies with the Financial institution Secrecy Act and the USA PATRIOT Act, which requires it to watch and scrutinize “every account,” together with FTX and Alameda analysis.
“Silvergate performed important due diligence on FTX and its associated entities together with Alameda Analysis, each throughout the onboarding course of and thru ongoing monitoring,” the CEO defined.
The CEO has additionally touted the agency’s “resilient steadiness sheet and ample liquidity” including that prospects’ deposits are “safely held.”
“Along with the money we stock on our steadiness sheet, our total funding securities portfolio could be pledged for borrowings on the Federal Dwelling Mortgage Financial institution, different monetary establishments, and the Federal Reserve Low cost Window – and may finally be offered ought to we have to generate liquidity to fulfill buyer withdrawal request,” defined Lane.
Associated: Block.one and its CEO grow to be largest Silvergate Capital shareholders
Silvergate has additionally been the main target of different hypothesis in current weeks, together with CFA-issued accountant and former portfolio supervisor Genevieve Roch-Decter, who expressed doubt in a Dec. 1 publish whether or not Silvergate may preserve its liquidity place and contemplated whether or not it may undergo from its shut relationship with FTX.
Roch-Decter was additionally involved with Silvergate’s Bitcoin-collateralized mortgage place, which may influence the agency’s steadiness sheet if Bitcoin’s (BTC) value continues to fall.
She additionally expressed fear that ought to the agency’s Silvergate Change Community — a community utilized by extremely used crypto exchanges to ship U.S. {dollars} and Euros between accounts — was compromised, it may “drag down the whole system.”
The Silvergate Change Community permits the financial institution’s digital forex and institutional investor shoppers to ship U.S. {dollars} and euros between their Silvergate accounts and the accounts of different Silvergate shoppers.
Right here’s a graphic the corporate shared in February: pic.twitter.com/RKGLq1ZTSg
— Genevieve Roch-Decter, CFA (@GRDecter) November 30, 2022
Lane confirmed within the assertion that Silvergate “prospects proceed to have entry to their U.S. greenback deposits after they want them and that Silvergate Change Community (SEN) has continued to function uninterrupted all through this era.”
“We deliberately carry money and securities in extra of our digital asset-related deposit liabilities,” the CEO added.
Lane’s public letter did little to stem the bleeding of Silvergate’s (SI) share value, which fell 8.49% to $24.24 on the New York Inventory Change (NYSE) on Monday, in accordance to MarketWatch.
Silvergate’s inventory is now down 52.43% over the past thirty days and decreased 85.34% over the past 12 months.
