Fed inspector blames crypto focus, nepotism for Silvergate Bank collapse

Crypto-friendly Silvergate Bank eventually collapsed this year due to over-dependence on dangerous crypto deposits and nepotism that led to inadequate management, according to inspectors at the Federal Reserve.In a Sept. 27 executive summary of its review into the collapse of Silvergate Bank, the Federal Reserve Boards Office of Inspector General pointed the finger at Silvergates change in method to focus on “customers engaged in crypto activities” in 2013.” Silvergates board of directors and senior management were inefficient, and the banks business governance and danger management abilities did not keep rate with the banks quick development, increasing intricacy and evolving risk profile,” concluded the report. The bank voluntarily wound down in March 2023, meaning that the bank didnt technically stop working.