Former Silvergate CRO says regulatory pressure, not bank run, led to collapse

Kate Fraher, the former Chief Risk Officer (CRO) of the crypto-friendly Silvergate Bank that closed in 2023, has argued that regulatory pressure, not a bank run, caused its failure. According to Cointelegraph, Fraher made her first public statement on the matter after the U.S. Securities and Exchange Commission (SEC) recently abolished its so-called 'gag rule' restricting public comments from settling parties. Fraher settled with the SEC in 2024, agreeing to a $250,000 civil penalty and a five-year ban from serving as an officer. She explained that she settled only to avoid years of legal battles, maintaining that no financial authority ever proved Silvergate had flawed Anti-Money Laundering (AML) controls. While acknowledging that the bank lost about 70% of its deposits after the FTX collapse, Fraher claimed that by early 2023, it had readjusted its capital and personnel and was able to continue operations. She insisted, however, that regulatory pressure on the broader crypto industry made it difficult to sustain the business.