Former Silvergate Executive Fraher Breaks Silence on SEC Settlement

Silvergate Bank was a major banking partner to the crypto industry. After FTX collapsed in November 2022, the bank suffered deposit outflows of about 70% and announced its liquidation in March 2023. On July 1, 2024, the U.S. Securities and Exchange Commission sued Silvergate and former senior executives for misleading investors, alleging that transaction-monitoring systems failed to flag more than $1 trillion in payments. The case became a focal point in the debate over crypto banking regulation.

After the SEC rescinded its “gag rule” on May 18, 2026, which had barred settling parties from publicly denying allegations, former Chief Risk Officer Kate Fraher spoke out for the first time on May 20. She said she settled in 2024 to avoid years of litigation and that no financial regulator had found the bank's anti-money-laundering controls ineffective. Fraher paid a $250,000 penalty and accepted a five-year bar from serving as a senior executive or director. She also said banks had terminated services to her and closed her lines of credit.