Kate Fraher, the former Chief Risk Officer (CRO) of Silvergate Bank, a crypto-friendly bank that closed in 2023, claimed that the cause of the bank's failure was regulatory pressure, not a bank run. According to Cointelegraph, Fraher reached a settlement with the U.S. Securities and Exchange Commission (SEC) in 2024, agreeing to pay a civil penalty of $250,000 and be barred from serving as an officer or director for five years. She made her first public statement after the SEC abolished the so-called ‘gag rule’ that had recently restricted public comments from settlement parties. She explained, “No financial authority has proven that Silvergate had flaws in its anti-money laundering (AML) controls, and we only settled to avoid years of legal battles.” She added, “It is true that approximately 70% of deposits were withdrawn after the FTX collapse, but we were in a position to continue operations by readjusting capital and personnel until early 2023. However, it became difficult to continue the business due to regulatory pressure imposed on the broader cryptocurrency industry.”
