Silvergate CEO Alan Lane wrote a Dec. 5 public letter to reassure stakeholders that the agency employs the most effective 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 through the onboarding course of and thru ongoing monitoring.”
In keeping with Lane, Silvergate carried out funds directed to Alameda Analysis primarily based on directions from the sender and per the most effective trade follow. The CEO famous that if the agency “detects exercise that’s sudden or probably regarding in any account, we conduct an investigation and, when required, confidentially file a suspicious exercise report in accordance with federal regulation.”
Considerations had 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.
Stories additionally revealed that the monetary service supplier was uncovered to bankrupt crypto lender BlockFi. In keeping with 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 issues about its liquidity, saying its prospects’ deposits are safely held.
Other than that, Lane revealed that the agency’s total funding securities portfolio may very well be pledged for borrowings at different monetary establishments to fulfill its prospects’ withdrawal requests.
Lane mentioned the agency’s enterprise was designed to accommodate deposit inflows and outflows beneath completely different market circumstances.
The CEO added that brief sellers and different opportunists are spreading the present hypothesis and misinformation about its enterprise to capitalize in the marketplace uncertainty. In keeping with him, the entire agency’s prospects 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.”