Silvergate Bank: The SEN Network, Diem's Lost Stablecoin and FTX Fallout

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Silvergate began in 1988 as a Southern California savings and loan and became a bank in 1996, operating three branches with car loans and commercial real estate lending. In 2013 CEO Alan Lane personally invested in Bitcoin, and in 2016 the bank began serving crypto firms that larger banks refused to touch. It built the Silvergate Exchange Network, a 24/7 internal ledger that let exchanges and institutional investors move dollars instantly while the Federal Reserve's systems closed for weekends. Silvergate listed in November 2019 at $13 a share and peaked at $219 in November 2021, and by the third quarter of 2022 held $12 billion in deposits from 1,677 SEN customers.

In May 2021 Silvergate partnered with Meta's Diem project to issue its stablecoin, but the Treasury withheld approval the night before a planned June 29, 2021 launch. Silvergate bought Diem's assets for roughly $182 to $200 million and later wrote off $196 million. It also lent $205 million to MicroStrategy for Bitcoin purchases. After FTX collapsed, deposits fell to $3.8 billion by December 2022, and on March 8, 2023 Silvergate announced a voluntary wind-down, repaying all deposits by November 2023. In July 2024 the SEC, Federal Reserve and California regulators imposed about $113 million in penalties, and the holding company filed for Chapter 11 in September 2024.

• Silvergate had $1.9 billion in assets and 250 crypto clients by 2017.
• Silvergate also put $200 million into Aptos, a startup founded by former Diem employees.
• Senators Elizabeth Warren, Roger Marshall and John Kennedy demanded answers on Silvergate's ties to FTX.
• The SEC said the bank failed to detect nearly $9 billion in suspicious transfers among FTX and related entities.
• An independent examiner was appointed in April 2025 after an internal probe run by the company's own law firm was deemed tainted.