Alan Lane, CEO of Silvergate Capital, has slammed “quick sellers” and “different opportunists” over the previous few weeks for spreading misinformation – simply to make themselves a fast buck.
In a public letter dated December 5, Lane stated that “numerous hypothesis – and misinformation” is being unfold by these events to “capitalize on market uncertainty” that led to the disastrous collapse of FTX in November.
His crypto-focused financial institution was not too long ago compelled to disclaim certainly one of these so-called FUD (Worry, Uncertainty and Doubt) campaigns when there was hypothesis that the agency was involved with bankrupt crypto lender Blockfi.
Lane used the most recent letter to the general public as an “alternative to set the document straight” relating to its funding relationship with FTX, in addition to the corporate’s “strong danger administration method.”
“Silvergate carried out important due diligence on FTX and its associated entities, together with Alameda Analysis, 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 examine “each account” it owns, together with FTX and Alameda Analysis.
The CEO defined, “Silvergate carried out important due diligence on FTX and its associated entities, together with Alameda Analysis, throughout the onboarding course of and thru ongoing monitoring.”
The CEO additionally cited the agency’s “resilient stability sheet and ample liquidity”, including that prospects’ deposits are “securely stored.”
“Along with the money we carry on our stability sheet, our total funding securities portfolio could also be pledged to Federal Dwelling Mortgage Banks, different monetary establishments, and borrowed funds within the Federal Reserve low cost window – and will ultimately be bought , we have to generate liquidity to fulfill buyer withdrawal requests,” defined Lane.
associated: Block.one and its CEO develop into Silvergate Capital’s largest shareholder
Silvergate has additionally been the middle of different hypothesis in current weeks, involving CFA-issued accountant and former portfolio supervisor Genevieve Roach-Decter, who Express A December 1 publish forged doubt on whether or not Silvergate can keep its liquid state and contemplated whether or not it could be affected by its shut relationship with FTX.
Roach-Dector was additionally involved about Silvergate’s bitcoin-collateralized mortgage place, which may influence the agency’s stability sheet if the value of bitcoin (BTC) continues to say no.
She additionally expressed concern that if the agency’s Silvergate change community – the community utilized by extremely used crypto exchanges to ship US {dollars} and euros between accounts – was compromised, it may “deliver down the entire system.” Is.”
The Silvergate Trade Community allows the financial institution’s digital forex and institutional investor prospects to ship US {dollars} and euros between their Silvergate accounts and the accounts of different Silvergate prospects.
Here is a graphic shared by the corporate in February: pic.twitter.com/RKGLq1ZTSg
— Genevieve Roach-Decter, CFA (@GRDecter) November 30, 2022
Lane confirmed within the assertion that Silvergate “continues to provide prospects entry to their USD deposits after they want them and the Silvergate Trade Community (SEN) has continued to function uninterrupted throughout this era.”
“We deliberately maintain money and securities in extra of amassed liabilities associated to our digital belongings,” the CEO stated.
Based on Marketwatch, Lane’s public letter did nothing to stem the decline in Silvergate (SI) share value, which fell 8.49% to $24.24 on the New York Inventory Trade (NYSE) on Monday.
Silvergate inventory is now down 52.43% over the past thirty days and down 85.34% over the past 12 months.
