Silvergate CEO Attempts to Address Concerns in Public Letter
Shares of the crypto-focused bank have been reeling in part due to links with failed crypto exchange FTX and sister company Alameda Research.
Citing "speculation – and misinformation – being spread by short sellers and other opportunists trying to capitalize on market uncertainty," Silvergate Capital (SI) CEO Alan Lane in a public letter attempts "to set the record straight."
"Silvergate conducted significant due diligence on FTX and its related entities including Alameda Research, both during the onboarding process and through ongoing monitoring," said Lane, noting the lender followed all relevant regulatory procedures when receiving wires directed to Alameda. As is required by both the bank's own systems and regulations, said Lane, any possible untoward activity was investigated and – if necessary – reported as such.
While Silvergate does not appear to be a creditor to FTX, it did have a sizable deposit relationship with the now-failed exchange. The bank disclosed one month ago that FTX deposits made up nearly 10% of its $11.9 billion in deposits from digital asset customers.
That news only added to short-seller concerns, with the stock – down another 8.5% in Monday's regular session – now off 53% over the past month.
"We have a resilient balance sheet and ample liquidity," concluded Lane, adding that the lender "intentionally [carries] cash and securities in excess of our digital asset related deposit liabilities."
Silvergate stock is little changed in after-hours trade on Monday evening.
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