AI Summary
5 min readSilvergate Bank started as a tiny California community bank with 38 employees and $300 million in assets. By 2022, it had grown into the financial backbone of the Bitcoin industry, with over $15 billion in assets and a network that let crypto companies move dollars 24/7. Then in November 2022, FTX collapsed, and Silvergate experienced the largest bank run in history as a percentage of deposits—70% of depositors pulled their money in a matter of weeks. The bank survived that run. What killed it was what came next.
The accidental Bitcoin bank
Alan Lane joined Silvergate as CEO in December 2008, the same month the Bitcoin white paper was published. For years, the bank grew slowly by doing conventional community banking—commercial real estate lending, residential mortgages—while struggling to attract deposits. In 2013, Lane became curious about Bitcoin after reading that with it "you could be your own bank." He started looking at crypto companies as a deposit source.
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What you'll learn
- 1 (00:02) **The Biggest Bank Run in History** - Alan Lane states that Silvergate experienced the largest bank run as a percentage of deposits in history.
- 2 (01:16) **Alan Lane's Background and Silvergate's Origins** - Lane introduces his 45-year banking career and his start at Silvergate in December 2008, just after the Bitcoin whitepaper.
- 3 (05:57) **The Search for Deposits Leads to Bitcoin** - Lane explains that a lack of a deposit franchise to fund loan growth led him to explore Bitcoin in 2013.
- 4 (10:38) **Navigating the Regulatory Framework for Bitcoin** - Lane details the process of banking money service businesses and using the first FinCEN guidance on virtual currency from March 2013.
- 5 (17:40) **Slow Growth and the Genesis of the SEN** - Lane walks through the slow build from 2014 to 2016, with only a handful of clients and deposits under $50 million.
- 6 (22:03) **Explosive 2017 Growth and "We're Gonna Need a Bigger Boat"** - Lane describes the launch of the SEN in late 2017 and the parabolic growth that followed.
- 7 (25:27) **A Critical Shift in Balance Sheet Management** - Lane explains a key strategic lesson learned from the SEN's success.
+ Full timestamped outline available in the app
Show Notes
“We experienced, as a percentage of deposits, the biggest bank run in history.”
Alan Lane joins to discuss the fall of Silvergate, the bank run that followed FTX’s collapse, and how his team kept meeting withdrawals as 70% of deposits left. He explains why he believed the bank could rebuild and what changed between surviving the run and deciding to close.
We also get into Operation Choke Point 2.0, why Alan believes Washington wanted the industry cut off from banking, and the failures of Silicon Valley Bank and Signature just days after Silvergate’s wind-down announcement.
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