Silvergate Bank
Shut DownInfrastructure · born 1988 · ✝ 2023
Crypto's main banking rail, killed by a post-FTX deposit run.
Silvergate Bank was a US bank central to the crypto industry through its real-time SEN payments network. After FTX's collapse triggered a massive deposit run, Silvergate sold assets at a loss and voluntarily wound down operations in March 2023.
- Peak
- crypto's main banking rail
- Cause
- Shut Down
- Year of death
- 2023
☠️ Cause of death
A post-FTX deposit run forced fire-sales of held-to-maturity assets at a loss, making the bank insolvent and prompting a voluntary wind-down.
📓 Lessons left behind
- —Concentrated deposits make a bank fragile.
- —Crypto and traditional banking risks now intertwine.
- —Bank runs move at internet speed.
🌱 The idea that survived
Crypto banking rails
Demonstrated demand for instant settlement networks while exposing the risk of concentrated deposits.
#banking#ftx-contagion#bank-run#infrastructure