Silvergate Was Solvent. It Was Still a Dead Bank.

The former CEO of Silvergate Capital, Alan Lane, picked a public fight this week with a story crypto loyalists will love: Silvergate didn't fail because it was insolvent. It was killed. Lane says a "coordinated attack" by the Biden administration — regulatory choke points and political pressure — forced the crypto-friendly bank into a voluntary wind-down in March 2023, even though, in his telling, it was solvent and met every withdrawal. He made the case on a new Substack, in his first public post.

Here is the thing about Lane's claim: the solvent part is largely true. That is precisely why it is misleading.

The part Lane got right

Silvergate did not blow up the way Silicon Valley Bank and Signature Bank did in that same terrible week of March 2023. It did not get seized by the FDIC. By November 2023 the bank had repaid its depositors in full, and it cost the deposit-insurance fund nothing. Lane's numbers hold up: the bank weathered a run that took out roughly 70% of deposits — around $8 billion — at the end of 2022 after the collapse of FTX, its biggest client, and it still paid everyone.

That is a real fact about Silvergate, and it is the root of the "we were viable" defense. If a bank can meet a panic's worth of withdrawals and hand every penny back, why liquidate? The answer buried in that question is the one Lane won't say out loud: repaying depositors in full is a statement about liquidation, not about survival. A bank can be solvent — assets on the books exceeding what it owes — and still be a dead going concern, because a bank is not its balance sheet. A bank is a funded, trusted deposit franchise that lives and dies on confidence.

The plumbing that killed it

Watch the entries from the fourth quarter of 2022, and the picture Lane leaves out appears. Digital-asset deposits fell 68% in the quarter, from $11.9 billion to $3.8 billion. To meet the withdrawals, Silvergate sold $5.2 billion of debt securities at a realized loss of roughly $718 million. That is the difference between a bank and a hedge fund: Silvergate had to recognize the losses to get cash when its customers fled. For the full year it booked a net loss of about $938 million.

The funding that kept it alive was emergency borrowing from the Federal Home Loan Bank of San Francisco — advances of about $4.3 billion, or roughly 40% of its liabilities, near the end of 2022. Think of the FHLB as the co-op every bank can pledge collateral to for a cash advance in a pinch. That is not a business; that is a lifeboat. Yet even on the lifeboat, in early March 2023 the bank disclosed it might be "less than well-capitalized", the state regulators describe when a bank's capital cushion is too thin to call it sound.

The rest was confidence leaving the building. On March 3 Silvergate shut down its Silvergate Exchange Network, the payments rail that connected exchanges; Coinbase and Paxos had already moved their deposits to Signature. A payments bank with no payments, no paying customers, and deposits funding it one emergency advance at a time is solvent on paper and dead as a franchise. Lane points to the liquid assets and cries foul; the regulators' own review, from the Fed's inspector general in September 2023 and the SEC in 2024, pointed at the same thing from the other side: dependence on crypto depositors, rapid growth, layered funding risk, and weak governance.

The incentives behind the blame

Here is where the "coordinated attack" story deserves a wary eye, not because there was no pressure — there plainly was an industry-wide squeeze that season (the FDIC "pause letters", the joint crypto-risk statements, even if regulators later withdrew them in April 2025) — but because Lane is not a disinterested witness.

He settled SEC charges in July 2024 over the bank's anti-money-laundering controls, accused of misleading investors while an automated system failed to screen over a trillion dollars in transactions and missed nearly $9 billion in suspicious transfers linked to FTX entities. Lane personally paid a $1 million penalty and accepted a five-year bar from serving as an officer or director of a public company, without admitting or denying the facts. The bank itself paid about $63 million across regulators, including a $43 million Fed fine. His Substack is not a historian's account; it is a defendant appealing his own verdict. When a barred banker insists the whole thing was politics, ask whose ox the story is goring.

What the revived stock actually is

Which brings the debate to where it matters for anyone who owns — or is tempted by — the ticker. Silvergate's common stock, trading under SICP, is alive again. The company emerged from Chapter 11 on March 31, 2026 with its common equity reinstated, after a May 2025 settlement cut by activist holders Stilwell and Exploration Capital rescued shares the original plan had proposed canceling for zero recovery.

Do not mistake the resurrection for a bank. The reorganized Silvergate holds no banking franchise — that went to Flagstar back in 2023. What it kept is best read in its tax returns: about $1.37 billion of federal net operating loss carryforwards, with state NOLs on top. That is the entire ballgame, and it is why the equity exists at all. Under tax rules, a company can only use its NOLs if its ownership stays continuous — if the old shareholders are wiped out, so are the tax assets. So the shares were reinstated not to finance a comeback but to keep the loss carryforwards alive inside a corporate shell, with residual claims and wind-down duties routed through a liquidation trust.

The counter is also in the capital structure. In August the new board raised $3 million, $1.5 million each from Stilwell and Exploration, at $0.60 a share, issuing five million shares against a float of roughly 37 million. That is a tax-attribute shell being kept funded, not a deposit franchise being rebuilt — the shares trade on the OTC Expert Market, the listing tier for companies that don't meet normal reporting standards.

So spend your curiosity on Lane's history if you want the courtroom drama. For the investment, the question was never whether the ex-CEO can spin the politics. Silvergate's equity is a bet on whether the NOLs and residual trust value are worth more than the shell costs to run — and a reminder that a bank can be solvent and still lose, because the franchise that made it a bank walked out the door before the regulators did.