Documents: besides FTX, US bank Silvergate has been used by 12+ crypto companies that were fined, closed, bankrupt, or under investigation, including Binance
The good news about the collapse of Sam Bankman-Fried's cryptocurrency empire is that its failure did not send shock waves through … Tweets: @smdiehl , @theraheelhasan , @mikulaja , @intelligencer , @cohenluc , @johnreedstark , and @ivanthek Tweets: Stephen Diehl / @smdiehl : The run on crypto bank Silvergate's deposits is worse than any seen since the Great Depression https://nymag.com/... Raheel Hasan / @theraheelhasan : Most banks refuse crypto companies' business for mundane tasks such as handling payroll. Silvergate was an exception, and their troubles will make this even harder. https://nymag.com/... Jason Mikula / @mikulaja : Even New York magazine is dragging Silvergate: https://nymag.com/... @intelligencer : Sam Bankman-Fried once lauded the tiny Silvergate Bank for being a key part of the crypto revolution. Now, critics of the bank's practices believe regulatory scrutiny will leave it in an unsustainable situation. @mcelarier reports https://nymag.com/... Luc Cohen / @cohenluc : “This run on Silvergate's deposits is worse than any seen in the Great Depression, according to a Federal Reserve study.” https://nymag.com/... John Reed Stark / @johnreedstark : To me, Silvergate Bank, a US Federal Reserve Member Bank, is BCCI Redux. It's a hornets nest of risk/greed/grift, brazenly profiting from, and enabling, a menacing crypto-cartel. US regulators must act, before Silvergate's toxic crypto-contagion spreads. https://nymag.com/... @ivanthek : “Intelligencer has obtained documents showing that, in addition to FTX, Silvergate has been the go-to bank for more than a dozen crypto companies that ended up under investigation, shut down, fined, or in bankruptcy.” https://nymag.com/...
Context & Ripple Effects
Silvergate was one of the few US banks willing to move dollars onto crypto exchanges, which made it indispensable to the industry — and, after FTX's collapse, a magnet for congressional scrutiny. The damage came fast: the bank liquidated debt to cover an $8.1B withdrawal run and cut 40% of staff, then later filed a delayed annual report citing investigations by regulators, Congress, and the DOJ.
The new documents reframe that story: Silvergate wasn't just FTX's bank, it was the bank for a dozen-plus crypto companies that were fined, shut down, bankrupt, or under investigation — with Binance, now facing an SEC suit over redirected customer assets, among them. That turns Silvergate from a victim of one client's fraud into evidence about how concentrated crypto's compliance risk was in a single lender.
First-order effects
- Silvergate's deposit run deepens: every newly named troubled client adds to the congressional and DOJ scrutiny already forcing it to delay its annual report, pressuring the remaining deposit base.
- Named clients like Binance lose their most reliable US dollar on-ramp, since mainstream banks already refuse crypto firms even for mundane tasks like payroll.
Second-order effects
- Other banks' reluctance to serve crypto hardens into standard de-risking practice — Silvergate's client list gives compliance officers a ready-made reason to decline the whole sector, pushing exchanges toward offshore banking.
- Rival crypto-friendly lenders inherit both the demand and the diligence burden: they must underwrite exactly the client profile that just destroyed Silvergate, repricing banking access for the entire industry.
Third-order effects
- If the pattern holds, US crypto firms structurally lose domestic dollar rails, forcing settlement offshore and giving regulators leverage over where the industry banks rather than whether it operates.
- The 'BCCI Redux' framing circulating around Silvergate points toward a regulatory template: specialized sector banks treated as systemic chokepoints, subject to the kind of consolidated oversight that ended earlier rogue-bank eras.
The trend: Crypto's US banking access is collapsing as its last specialized lenders absorb the sector's accumulated compliance risk, pushing dollar settlement offshore.