Former Silvergate Bank chief risk officer Kate Fraher has pushed back against the way regulators handled the bank’s 2024 settlement with the U.S. Securities and Exchange Commission, saying the agency never actually proved the bank’s anti-money laundering controls had failed.
Fraher said she agreed to settle with the SEC only to avoid a long and expensive legal fight. She explained that the process placed enormous pressure on defendants and caused major personal and financial damage.
According to Fraher, she was personally “de-banked” during the investigation, with banks closing her accounts and credit lines unexpectedly.
Her comments came shortly after the SEC, under Chair Paul Atkins, ended its long-standing “no deny” policy. That rule had stopped people who settled with the SEC from publicly denying the allegations against them. The policy had been in place since 1972.
Fraher said the rule change finally gave her the chance to speak openly about the case.
Back in July 2024, the SEC sued Silvergate Capital Corporation, former CEO Alan Lane, and Fraher. Regulators accused them of misleading investors about the bank’s anti-money laundering systems and its monitoring of suspicious crypto-related transactions connected to companies like FTX.
At the time, former SEC enforcement director Gurbir Grewal said Silvergate failed to identify nearly $9 billion in suspicious transfers linked to FTX entities.
As part of the settlement, Silvergate agreed to pay a $50 million penalty without admitting or denying wrongdoing. Lane paid $1 million, while Fraher paid $250,000 and accepted a five-year ban from serving as an executive or director at a public company. Former CFO Antonio Martino chose not to settle and is still fighting the case.
Fraher also challenged the common narrative around Silvergate’s collapse. While many blamed the failure of FTX for bringing down the bank, she argued that Silvergate remained financially stable even after large customer withdrawals.
She said the bank managed to keep enough capital and continued operating after cutting staff and restructuring in early 2023. According to her, the bigger problem was growing pressure from regulators and policymakers who were becoming increasingly hostile toward crypto banking.
Her comments matched claims made by crypto investor Nic Carter, who previously argued that U.S. regulators quietly pressured banks to reduce ties with crypto companies during what many in the industry called “Operation Chokepoint 2.0.”
Carter had claimed that regulators informally pushed Silvergate to sharply reduce crypto-related deposits, even though no direct criminal wrongdoing tied to its relationship with FTX was ever proven. He also connected Silvergate’s collapse to the later failures of Signature Bank and Silicon Valley Bank during the 2023 banking crisis.
Fraher also praised SEC Commissioner Hester Peirce for supporting the end of the SEC’s gag rule. Peirce had argued that settlement agreements should not stop people from publicly discussing enforcement cases or criticizing regulators.
