Silvergate Capital CEO Alan Lane has slammed “brief sellers” and “different opportunists” for spreading misinformation in latest weeks – simply to make a fast buck.
In a public letter Dec. 5, Lane stated there was “numerous hypothesis — and misinformation” being put forth by these events to “capitalize on market uncertainty,” which partly led to FTX’s catastrophic collapse in November.
Its crypto-focused financial institution was not too long ago compelled to dismiss a kind of so-called FUD (worry, uncertainty, and doubt) campaigns final week amid hypothesis that the agency was uncovered to bankrupt crypto lender BlockFi.
Lane additionally used the latest public letter as an “alternative to make clear the information about its funding relationship with FTX, in addition to the agency’s “strong strategy to danger administration.”
“Silvergate has performed intensive due diligence on FTX and its associates, together with Alameda Analysis, each throughout the onboarding course of and through 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 corporate complies with the Financial institution Secrecy Act and the USA PATRIOT Act, which require it to observe and audit “each single account,” together with analysis from FTX and Alameda.
“Silvergate has performed intensive due diligence on FTX and its associates, together with Alameda Analysis, each throughout the onboarding course of and ongoing monitoring,” said the CEO.
The CEO has additionally touted the corporate’s “strong steadiness sheet and ample liquidity,” including that clients’ deposits are “stored secure.”
“Along with the money that we stock on our steadiness sheet, our total funding securities portfolio could be pledged for loans with the Federal Residence Mortgage Financial institution, different financial establishments and the Federal Reserve Low cost Window – and might finally be bought as wanted to generate liquidity to fulfill buyer withdrawal necessities.” fulfill,” Lane defined.
Associated: Block.one and its CEO turn out to be main shareholders of Silvergate Capital
Silvergate has additionally been the main focus of different hypothesis in latest weeks, together with CFA-issued chartered accountant and former portfolio supervisor Genevieve Roch-Decter, who in a Dec. 1 publish expressed doubts about Silvergate’s means to take care of its liquidity place and mused whether or not it might his shut relationship with FTX might endure in consequence.
Roch-Decter was additionally involved about Silvergate’s bitcoin-backed mortgage place, which might have an effect on the corporate’s steadiness sheet if the value of bitcoin (BTC) falls additional.
She additionally expressed concern that the agency’s Silvergate Alternate Community — a community utilized by closely used crypto exchanges to ship US {dollars} and euros between accounts — could be compromised, it might “carry down your complete system.” .
The Silvergate Alternate Community permits the financial institution’s digital forex clients and institutional buyers to ship US {dollars} and euros between their Silvergate accounts and the accounts of different Silvergate clients.
This is 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 “clients will proceed to have entry to their US dollar deposits after they want them and that the Silvergate Alternate Community (SEN) has continued to function uninterrupted throughout this time.”
“We deliberately carry money and securities that exceed our deposit legal responsibility associated to digital property,” the CEO added.
Lane’s public letter did little to stem the decline in Silvergate (SI) inventory, which fell 8.49% to $24.24 on the New York Inventory Alternate (NYSE) on Monday, in accordance with MarketWatch.
Silvergate’s inventory is now down 52.43% within the final 30 days and 85.34% within the final 12 months.