Operation Choke Point 2.0: The Fall of Silvergate | Alan Lane

— Alan Lane built Silvergate from a 38-person, $300 million community bank in 2008 into a $15 billion asset institution serving the Bitcoin and crypto industry, pioneering the Silvergate Exchange Network (SEND) for 24/7 inter-exchange settlement.

— In November 2022, following FTX's collapse, Silvergate experienced a historic 70% deposit withdrawal bank run but survived by selling $5 billion in securities over three weeks and borrowing from the Fed, taking $700 million in losses.

— Lane acquired the Diem stablecoin project (formerly Libra) in January 2022 after the President's Working Group report recommended stablecoins be issued only by insured depository institutions, a move he believes put Silvergate on Washington's radar.

— After surviving the deposit run, regulatory pressure intensified through two joint interagency letters in January and late February 2023 effectively requiring diversification away from crypto, making continued focused Bitcoin banking untenable.

— Silvergate voluntarily wound down in March 2023, announced March 8th; Silicon Valley Bank failed March 10th and Signature Bank was seized March 12th—Lane questions whether Silvergate's announcement triggered broader contagion.

— Lane believes Washington policymakers deliberately sought to cut the Bitcoin and crypto industry off from the banking system through regulatory action, separate from traditional prudential concerns, and he personally experienced debanking during this period.

— The structural choices Silvergate made—keeping deposits in liquid securities rather than long-term loans, maintaining over-collateralized Bitcoin lending, and rigorous compliance infrastructure—directly enabled survival of an unprecedented bank run; balance sheet design matters more than most realize during systemic stress.

— Going all-in on a niche industry with authentic product-market fit (SEND network achieving critical mass) can generate extraordinary growth, but regulatory and political pressure can reverse overnight if that niche becomes politically disfavored, regardless of prudential soundness.

— Personal debanking and regulatory targeting of an entire industry sector suggests that Bitcoin self-custody and censorship-resistant settlement become strategically important; Lane's journey from skeptical banker to "hardcore Bitcoiner" reflects how institutional friction accelerates adoption rationale.