Silvergate CEO Alan Lane wrote a Dec. 5 public letter to reassure stakeholders that the agency employs the very best due diligence course of and has a sturdy danger administration management.
Silvergate addresses FTX, Alameda publicity
Lane wrote that the monetary establishment performed “important due diligence on FTX and its associated entities, together with Alameda Analysis, each in the course of the onboarding course of and thru ongoing monitoring.”
Based on Lane, Silvergate carried out funds directed to Alameda Analysis based mostly on directions from the sender and in line with the very best trade follow. The CEO famous that if the agency “detects exercise that’s surprising or probably regarding in any account, we conduct an investigation and, when required, confidentially file a suspicious exercise report in accordance with federal regulation.”
Issues have been raised beforehand that FTX’s implosion impacted Silvergate. Nonetheless, Lane revealed that the agency’s publicity to the bankrupt crypto change was restricted to lower than 10% of its complete deposits as of Sept. 30.
Experiences additionally revealed that the monetary service supplier was uncovered to bankrupt crypto lender BlockFi. Based on the report, lower than $20 million of its complete deposits was from the lender.
Silvergate has a resilient steadiness sheet and ample liquidity
The CEO additionally addressed considerations about its liquidity, saying its clients’ deposits are safely held.
Aside from that, Lane revealed that the agency’s whole funding securities portfolio could possibly be pledged for borrowings at different monetary establishments to fulfill its clients’ withdrawal requests.
Lane mentioned the agency’s enterprise was designed to accommodate deposit inflows and outflows underneath totally different market circumstances.
The CEO added that quick sellers and different opportunists are spreading the present hypothesis and misinformation about its enterprise to capitalize in the marketplace uncertainty. Based on him, all the agency’s clients have continued to entry their U.S. greenback deposits, and its Silvergate Alternate Community (SEN) has continued to function.
He concluded that:
“Silvergate operates in accordance with the Financial institution Secrecy Act and the USA PATRIOT Act.”
