Silvergate, the crypto-friendly bank that recently entered voluntary administration, is seeing three C-suite executives depart as it progresses into the next phase of liquidation.
President and CEO Alan J Lane, alongside Chief Legal Officer John M. Bonino, will step down from their roles on Aug. 15. Similarly, Chief Financial Officer Antonio Martino will depart on Sept. 30.
The company declares that these departures are to help with a smooth transition, not due to any internal disagreements.
Silvergate Transition to Streamline Operations
In a filing submitted to the Securities and Exchange Commission on Aug. 15, Silvergate’s parent company disclosed that the executives will not receive the contract-specified bonuses.
However, they will receive some compensation to account for the exceptional circumstances:
“Each will receive certain severance benefits provided to Bank employees being discharged in the course of the Bank Liquidation.”
Silvergate was one of the largest pro-crypto banks in the world and a major issuer of the USDC stablecoin.
On March 8, the institution experienced a collapse, citing its failure as a result of a domino effect triggered by the collapse of the FTX cryptocurrency exchange.
The downfall of FTX, one of its key clients, reportedly caused a $1 billion loss in the last quarter of 2022. Silvergate also counted major exchanges Coinbase and Gemini among its client roster.
Kathleen M. Fraher, the Chief Transition Officer, will serve as the principal executive officer. Silvergate will not be appointing anyone to replace the departing executives:
“At this time the Company does not expect to appoint a President and Chief Executive Officer of the Company, a Chief Executive Officer of the Bank or a Chief Financial Officer of the Company and the Bank in light of the plan to pursue the Bank Liquidation.”
Banking Crypto Regulations to Get Tougher Around the World
Following the demise of Silvergate Bank, and merely a day later, Silicon Valley Bank (SVB), an equally crypto-friendly institution, regulators are pushing for more stringent rules for how banks can deal with crypto.
On July 17, National Australia Bank (NAB) announced it would block payments to high-risk cryptocurrency exchanges. Just two months before this, Australia’s security regulator revoked Binance Australia’s financial license.
On June 20, The European Union reached a consensus, which entailed increasing the mandated deposit amount for crypto assets held by European banks.
It included a proposed risk weight of up to 1,250% for cryptocurrencies. Essentially, banks will need to hold over one euro for each corresponding value of crypto assets.
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