Silvergate, once known as a crypto-friendly bank, faces significant changes as CEO Alan Lane and two other key executives prepare to leave.
Alan Lane and the firm’s chief legal officer, John Bonino, will step down on Aug. 15. Antonio Martino, the chief financial officer, will leave on Sept. 30.
The departures were confirmed in an Aug. 15 filing with the US Securities and Exchange Commission (SEC) by the parent company, Silvergate Capital. The document outlined that the executives’ departures are part of the bank’s ongoing voluntary liquidation process, which has been the firm’s priority for months.
The three executives will receive severance benefits but won’t be subject to compensation from the company.
Kathleen Fraher, Silvergate’s chief risk officer, will step up as the chief transition officer. Chief accounting officer Andrew Surry will fulfill principal financial officer duties.
The company does not expect to appoint new top-level executives because of the plan to pursue bank liquidation.
Silvergate struggles with legislators amid massive losses
Silvergate’s downfall began after legislators criticized the bank for failing to control transactions between the now-defunct Alameda Research and FTX. The firm revealed a $1 billion net loss in 2022’s fourth financial quarter, leading major clients like Coinbase to sever ties.
The bank’s instant settlement platform, SEN, was a staple of its business, used heavily by institutional crypto clients. However, the Federal Deposit Insurance Corporation highlighted the risk of serving multiple crypto clients, stating that the practice can introduce liquidity risks.
Silvergate’s troubles became apparent when users withdrew $8.1 billion in crypto deposits in the final fiscal quarter of last year, coinciding with the collapse of FTX. To weather the withdrawals, the company tapped the Federal Home Loan Bank for a $4.3 billion loan and sold around $5.2 billion in debt securities, actions that drew scrutiny from US Senators.
Silvergate’s wind-down has sent ripples through the crypto ecosystem, with the failures of other crypto-friendly banks like Silicon Valley Bank and Signature Bank following suit.