Alan Lane, CEO of Silvergate, wrote a letter that was made public to assure clients that their funds are secure. Alan Lane has slammed short sellers and other opportunists for spreading misleading information over the past few weeks in an effort to make a fast profit.
Alan stated:
“It has been a very difficult few weeks for the digital asset industry, as we have all come to terms with the apparent misuse of customer assets and other lapses of judgment by FTX and Alameda Research. There has also been plenty of speculation – and misinformation – being spread by short sellers and other opportunists trying to capitalize on market uncertainty.”
Alan described the letter as a chance to set the record straight. According to Alan, FTX and its sister company, Alameda Research, were the subjects of “significant due diligence.”
Alan added:
“Silvergate conducted significant due diligence on FTX and its related entities including Alameda Research, both during the onboarding process and through ongoing monitoring, in accordance with our risk management policies and procedures and the requirements outlined above.”
“Silvergate conducted significant due diligence on FTX and its related entities, including Alameda Research, both during the onboarding process and through ongoing monitoring, in accordance with our risk management policies and procedures.” Read more here: https://t.co/9nAViJOzoi
— Silvergate Bank (@silvergatebank) December 5, 2022
When rumours circulated last week that the crypto-focused bank was exposed to the insolvent crypto lender BlockFi, it was compelled to refute the uncertainty and doubt claims.
Alan also mentioned that customer deposits are securely stored, emphasizing the company’s strong balance sheet and sufficient liquidity.
Alan stated:
“In addition to the cash we carry on our balance sheet, our entire investment securities portfolio can be pledged for borrowings at the Federal Home Loan Bank, other financial institutions, and the Federal Reserve Discount Window – and can ultimately be sold should we need to generate liquidity to satisfy customer withdrawal request. We intentionally carry cash and securities in excess of our digital asset related deposit liabilities.”
Silvergate and FTX appear to have a deposit-only relationship. FTX accounted for 10% of Silvergate’s total digital asset deposits of $11.9 billion.
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