A Sad Story — Silvergate Bank, founded in 1988 and formally amongst the great crypto-futurists of its time, ended its journey with a whimper in 2023. Its CEO, Alan Lane, along with its chief legal officer John Bonino and chief financial officer Antonio Martino prepared to make their exits in August and September respectively, as the regulated financial institution pursued closure after experiencing a $1 billion loss attributed to alleged fraud perpetrated by their client firm FTX. What followed was an accompanying slew of proposed lawsuits towards the bank and its employees.
But an untold story exists prior to this rather sad ending – one of ambition and ambition realized. In an interview with Alan Lane in 2018, he spoke of his investment in bitcoin before the notion became commonplace. He proposed his goal to take Silvergate public, culminating into its eventual Nasdaq opening on November 7th, 2019. With his fortune made, Lane discussed the idea of a backbone for the US Dollar in the digital world – and this vision of banking and finance extended far beyond bitcoin to shape an all new world of cryptos and tokenization.
Given Lane’s background as a technologist, it comes as little surprise that the promise of blockchain was attractive to him during his near two decades of frontline immersion in the world of — Bitcoin. As of that day in November 2019, the cryptocurrency market was valued at $207 billion — an immeasurable leap from its near $6 billion valuation just three years prior. And in Light of the continued success cryptocurrencies have enjoyed in the intervening years, Silvergate Bank was a cornerstone in the blockchain financis revolution, few could have ignored.
Fast-forward to today and some pesky questions remain, mainly revolving around whether its downfall could have been averted and if the cryptosphere will see such a revolutionary force again. Were the likes of Binance, Huobi Global, Nexo Capital, and Bittrex complicit in contributing to Silvergate’s demise, given they were clients of the bank? Was the decease a result of the inability to perform adequate due diligence? The only answers to these questions, circulated among gossip for now, will become more abundant over time.
But whatever the result, today’s legacy is clear: Silvergate Bank was a vestige of courage from a sea of disbelievers who saw cryptocurrency, and Bitcoin, as not only a valuable asset but an invaluable opportunity to make investments more transparent and reputable in the digital marketplace.
When suspicion that now-bankrupt FTX’s clients, Binance.US, Huobi Global, Nexo Capital, and Bittrex were not held accountable to their fiduciary standards, the public was thrown into turmoil. And Silvergate Bank was prepared to pursue closure following the $1 billion it deemed appropriate to suffer for its involvement with the scandal.
As a result, there have been proposed lawsuits against the firm and its director, Alan Lane included, along with the unavoidable prospect of wind down and liquidation of its treasured Silvergate Bank, the implications of which sent ripples across the realm of cryptocurrency investments. But here was raised an important question: did Lane’s ambition, comprised as it was in the passion of a vision for a new financial world, weaken sufficiently to condemn its long established goal in failure if not fraud?
That’s still left unanswered. What is more certain though, is that Silvergate Bank retains an integral part in the infrastructure and bigger picture view that drove comprehensive, global change upon the groundbreaking decision to open the boarders of what was previously considered a daring marketplace for a privileged few, into an international economy any and everyone can enjoy.
