Silvergate Bank sees three top executives leave due to its liquidation process following its collapse in March 2023, linked to the FTX exchange failure. With growing global oversight, regulations for crypto and digital asset banking are set to tighten.
Silvergate, a bank that’s friendly to cryptocurrencies, is going through a voluntary administration process. Now, three top executives are leaving as the bank moves forward with its liquidation.
Alan J Lane, who is the President and CEO, and John M. Bonino, the Chief Legal Officer, will stop working on August 15. Antonio Martino, the Chief Financial Officer, will leave on September 30.
The company says that these departures are to make the transition easier and not because of any problems within the company.
Silvergate Streamlines Operations Through Transition
Silvergate’s parent company shared in a filing to the Securities and Exchange Commission on August 15 that the departing executives won’t be given the bonuses mentioned in their contracts. However, they will receive compensation considering the unusual situation. They will get certain benefits that employees usually receive when leaving during the bank’s liquidation process.
Silvergate was a big bank supporting cryptocurrencies and a significant issuer of the USDC stablecoin. It faced a big problem on March 8 when it collapsed. The collapse happened because of a chain reaction that started with the failure of the FTX cryptocurrency exchange. This caused a loss of around $1 billion in the last part of 2022.
Silvergate had major clients like Coinbase and Gemini. Kathleen M. Fraher, the Chief Transition Officer, will now be the main executive officer. Silvergate doesn’t plan to replace the departing executives for now, as they are focusing on the bank’s liquidation plan.
Global Crypto Banking Rules to Tighten
After Silvergate Bank’s collapse, and shortly afterward Silicon Valley Bank (SVB), which also liked cryptocurrencies, regulators are calling for stricter rules for how banks handle crypto.
On July 17, National Australia Bank (NAB) said it won’t allow payments to risky crypto exchanges. Just two months earlier, Australia’s security regulator took away Binance Australia’s financial license.
On June 20, the European Union agreed to make European banks keep more money in reserve for crypto assets. They suggested a high risk for cryptocurrencies, which means banks might have to hold over one euro for each value of crypto assets.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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