Insider: Silvergate forced by Biden administration to limit crypto deposits to 15% or face closure

Nic Carter, partner at Castle Island Ventures, said that failed crypto-friendly bank Silvergate Bank might have survived if it had not been forced into voluntary liquidation by U.S. regulators seeking to “strangle” the cryptocurrency industry. He cited Silvergate’s recent bankruptcy filing and conversations with sources that showed the Biden administration told the bank it must cap crypto deposits at 15% or face consequences. “The government’s desire to stifle the domestic crypto industry through secretive rulemaking targeting crypto-focused banks has sparked and exacerbated the 2023 banking crisis, the largest since the 2008 financial crisis,” Carter had said. Signature Bank and Silicon Valley Bank — former banking partners of a16z and Pantera Capital — were two other crypto-friendly banks that closed early last year. Carter wrote that the banks faced “undue pressure” from the Federal Deposit Insurance Corporation and U.S. senators such as Elizabeth Warren, who demanded details of their relationship with former banking client FTX be disclosed. A Silvergate insider told Carter that the company could either comply with the 15% rule or surrender. Carter called Silvergate's decision to voluntarily liquidate rather than accept FDIC takeover "suspicious" - something that has only happened a few times in the past 30 years. (Cointelegraph) Earlier, Silvergate executives said that a "sudden regulatory shift" led to the bank's closure in a bankruptcy filing.