According to Lane, short sellers and other exploiters spread a lot of rumors and inaccurate statements to capitalize on the market's suspicion caused by FTX's spectacular crash in the first few weeks of November 2022.
The recently made public letter was also used by Lane to refute any rumors and make a clear declaration about its investment connection with FTX and the company's extensive risk management program.
Alan Lane, Chief Executive Owner of Silvergate Capital, has criticized "short sellers" and "other opportunists" for dispensing wrong details in the last couple of weeks just to score themselves a quick buck. In a December 5th public statement, Lane mentioned that there were a lot of talks and false information peddled by short sellers and other opportunists to exploit the market's skepticism provoked by FTX's unprecedented meltdown in the early weeks of November 2022.
His crypto-centered financial institution was recently coerced to refute one of these so-called FUD (fear, uncertainty, and doubt) pushes last week when a rumor erupted hinting that the institution was affected by the bankrupt crypto lender BlockFi.
Lano also utilized the just released letter to the public as a means to condemn every speculation and put a straight statement forward concerning its investment relationship with FTX, together with the company's massive risk management scheme. He emphasized that the company strictly acts in line with the Bank Secrecy Act and the USA PATRIOT Act, which ensures it checks and evaluates each and every account, including FTX and Alameda research.
“Silvergate conducted significant due diligence on FTX and its related entities including Alameda Research, both during the onboarding process and through ongoing monitoring,” the CEO explained. The CEO further praised the firm's sturdy balance sheet and ample liquidity, highlighting that customers' deposits are securely kept.
“In addition to the cash we carry on our balance sheet, our entire investment securities portfolio can be pledged for borrowings at the Federal Home Loan Bank, other financial institutions, and the Federal Reserve Discount Window – and can ultimately be sold should we need to generate liquidity to satisfy customer withdrawal request,” explained Lane.
Silvergate has also been the attention of several rumors in the past few days which include CFA-issued accountant and erstwhile portfolio manager Genevieve Roch-Decter, who expressed skepticism in a Dec 1. post whether Silvergate could sustain and keep its liquidity place and thought about if it could be affected by its keen affiliation with FTX.
Roch-Decter was also concerned about Silvergate's position in a Bitcoin-collateralized loan, which might have an effect on the company's financial sheet if the price of Bitcoin (BTC) keeps dropping. She also voiced concern that a breach in the company's Silvergate Exchange Network, which is used by popular cryptocurrency exchanges to transfer dollars and euros between accounts, may "bring down the entire system."
