Silvergate Bank, once a leading crypto-friendly institution, might have survived if not for U.S. regulatory intervention, according to Nic Carter, partner at Castle Island Ventures. In a Sept. 25 article on Pirate Wires, Carter claimed the bank was on a recovery path before being forced into voluntary liquidation by government pressures to limit its crypto deposits to 15%.
Carter calls this part of "Operation Choke Point 2.0," a coordinated effort to cut off crypto firms from banking services during the 2023 banking crisis. He argued that this contributed to the crisis, likening it to the 2008 financial meltdown. Other crypto-friendly institutions, such as Signature Bank and Silicon Valley Bank, were also reportedly shut down under similar pressures.
An insider from Silvergate revealed that the bank had no option but to comply with the restrictions or risk complete closure. Carter believes that without these imposed limits, Silvergate’s balance sheet could have recovered by late 2023 or early 2024.
Though acknowledging Silvergate's issues, like insufficient money laundering controls and delays in detecting improper transfers related to FTX, Carter insists these shortcomings didn't justify the severe regulatory measures.
This report coincides with statements from Vice President Kamala Harris, affirming the U.S.'s goal to remain a leader in blockchain and emerging technologies like AI.
