Fun

News Feed - 2023-10-03 02:10:39

Tom Mitchelhill3 hours agoFed inspector blames crypto focus, nepotism for Silvergate Bank collapseAn investigation into Silvergate Bank found that its collapse was brought about by a dependency on crypto deposits and “ineffective” senior management.794 Total views27 Total sharesListen to article 0:00NewsJoin us on social networksCrypto-friendly Silvergate Bank ultimately collapsed this year due to over-dependence on risky crypto deposits and nepotism that led to ineffective management, according to United States Federal Reserve inspectors.


In a Sept. 27 executive summary of its review into the bank’s collapse, the Fed Board’s Office of Inspector General pointed the finger at Silvergate’s change in strategy to focus on “customers engaged in crypto activities” in 2013.“Silvergate’s concentration in crypto industry deposit customers, rapid growth, and multilayered funding risks led to the bank’s voluntary liquidation.”


Evolving from a little-known institution in the early 2010s, Silvergate expanded rapidly to become the premier bank for crypto clients, growing from $1 billion in deposits in 2017 to $16 billion by 2021.


During this period of rapid growth, the Fed said the bank grew to become essentially a single-industry lender, with the vast majority of its customer deposits being uninsured and non-interest bearing.The factors that led to Silvergate’s voluntary liquidation. Source: Office of Inspector General


If the institution had properly followed existing banking regulations, it should have filed a new application with the Fed, but government supervisors failed to pressure it to establish new risk protection measures.


While some government supervisors had voiced their concerns with the bank’s activities, the Fed said these should have been escalated through “stronger, earlier, and more decisive supervisory action.”


Silvergate’s over-reliance on crypto became evident following the collapse of the now-defunct FTX crypto exchange in November 2022, with tens of billions of dollars in capital fleeing the sector in the following months.


Related:Scaramucci leads bidding for Silicon Valley Bank VC arm: Report


Silvergate’s purported wrong-doings weren’t just limited to crypto. Investigators also claimed that nepotism plagued the banks’ senior management, leading to an incompetent and ineffective corporate structure that failed to address the many risks present at the time.“Further, nepotism, evidenced in the several familial relationships among members of the bank’s senior leadership team, undermined the effectiveness of the bank’s risk management function.“


“Silvergate’s board of directors and senior management were ineffective, and the bank’s corporate governance and risk management capabilities did not keep pace with the bank’s rapid growth, increasing complexity and evolving risk profile,” concluded the report.


The bank voluntarily wound down in March 2023, meaning it didn’t technically fail. This meant that the government did not have to step in and force it to pay back depositors.


Magazine:Blockchain detectives — Mt. Gox collapse saw birth of Chainalysis# Federal Reserve# Business# Banking# Banks# Regulation# SilvergateAdd reactionAdd reactionRead moreWhat are NFT royalties, and how do they work?AI tech boom: Is the artificial intelligence market already saturated?Expect new crypto regulations to follow Bitcoin ETFs

News Feed

Banks in Russia to Lose $700 Million a Year Due to Digital Ruble, Experts Say
Banks in Russia to Lose $700 Million a Year Due to Digital Ruble, Experts Say Russian banks may be the main losers from the introduction of a digital ruble while retailers will sav
Donald Trump’s crypto platform is missing one thing
Luke Hogg3 hours agoDonald Trump’s crypto platform is missing one thingPresident Biden has been ruthless in his quest to eradicate the crypto industry. Trump should commit to pardoning the developers that Biden impriso
Australia cracks down on online gambling with crypto, credit card ban
Ezra Reguerra1 hour agoAustralia cracks down on online gambling with crypto, credit card banThe government warned betting companies that failing to comply with the new rules could result in a fine of up to 234,750 Austra
Massachusetts-Based Bankprov to End Loan Offerings Secured by Cryptocurrency Mining Rigs
Massachusetts-Based Bankprov to End Loan Offerings Secured by Cryptocurrency Mining Rigs The Amesbury, Massachusetts-based Bankprov, a subsidiary of Provident Bancorp, has announce
Tom Blackstone6 hours agoBase’s ‘Onchain Summer’ saw over 700K NFTs minted from 268K users in AugustThe “Onchain Summer” promotion drove activity to the new network, with hundreds of thousands of users minting
Mt Gox Saga Nears End of the Road — Creditors Required to Register With Exchanges, Bitstamp Selected by Trustee
Mt Gox Saga Nears End of the Road — Creditors Required to Register With Exchanges, Bitstamp Selected by Trustee Mt Gox creditors have been issued new information concerning their
Russia’s Sber Bank Aims for Blockchain Integration With Ethereum and Metamask
Russia’s Sber Bank Aims for Blockchain Integration With Ethereum and Metamask Banking giant Sber wants to integrate its blockchain platform with the Ethereum blockchain and the M
Dogecoin Hits A ‘Blood In The Streets’ Moment: Buy Or Sell Now?
Este artículo también está disponible en español. Dogecoin (DOGE) has again found itself in the crosshairs of market watchers, with a “blood in the streets” moment em
Web3 needs player-centric games for mass adoption — Websea exec
Zoltan Vardai11 hours agoWeb3 needs player-centric games for mass adoption — Websea execInstitutions are also becoming interested in Web3 gaming as more player-centric GameFi projects emerge.588 Total views2 Total shar
Bitcoin Clears $65,000: Can The Bulls Push BTC To Historic Heights?
Este artículo también está disponible en español. Bitcoin (BTC) has made a bold move, breaking past the crucial $65,000 level and sparking renewed hope of reaching its al
Seaside Resort in Slovenia Promotes Itself With NFTs
Seaside Resort in Slovenia Promotes Itself With NFTs The tourism organization in Portorož, a summer resort on the Adriatic coast of Slovenia, has decided to promote the desti
A Team of Experienced Crypto Enthusiasts Launch RIDGE Charity Token
A Team of Experienced Crypto Enthusiasts Launch RIDGE Charity Token press release PRESS RELEASE. Podgorica, Montenegro – A group of crypto enthusiasts has announced the relea