July 23, 2024
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The CEO of Silvergate Calls “Short Sellers” Out for Spreading False Information

In the statement, Lane also took the chance to “set the record straight” about its investment relationship with FTX and the firm’s “robust risk management approach.”

Alan Lane, the CEO of Silvergate Capital, has criticized “short sellers” and “other opportunists” for spreading false information in the last few weeks to make quick money.

In a public letter dated December 5, Lane said that these parties were spreading “a lot of speculation and false information” to “take advantage of market uncertainty,” which was partly caused by FTX’s disastrous collapse in November.

His crypto-focused bank had to deny one of these so-called “FUD” (fear, uncertainty, and doubt) campaigns last week when it was thought that the company was exposed to the bankrupt crypto lender BlockFi.

Lane also used its most recent letter to the public as a “opportunity to set the record straight” about its investments with FTX and the “robust risk management approach” of the company.

Lane said again that the company complies with the Bank Secrecy Act and the USA PATRIOT Act. This means that “every account,” including FTX and Alameda research, is watched and looked over.

“Silvergate did a lot of research on FTX and its related companies, like Alameda Research, both during the onboarding process and by keeping an eye on them over time,” the CEO said.

The CEO has also talked up the company’s “resilient balance sheet and ample liquidity” and said that customers’ deposits are “safely held.”

“In addition to the cash on our balance sheet, our entire portfolio of investment securities can be used as collateral for loans from the Federal Home Loan Bank, other financial institutions, and the Federal Reserve Discount Window. They can also be sold if we need cash to meet customer withdrawal requests,” said Lane.