Silvergate Bank Settlement: Former Chief Risk Officer Speaks Out

Former Silvergate Bank chief risk officer Kate Fraher has shed light on the bank's winding down and settlement with the Securities and Exchange Commission (SEC). The settlement, which was reached in 2024, included a $250,000 civil penalty and a five-year ban from serving as an executive or director. Fraher emphasized that no regulator had proven AML controls at Silvergate had failed.

Fraher stated that she agreed to the settlement to avoid a lengthy court battle over allegations that Silvergate misled investors about its anti-money-laundering rules and how it monitored crypto customers. She also highlighted the personal costs of the enforcement process, noting that she was de-banked and faced immediate credit-line closures.

The SEC's decision to rescind a gag rule on Monday has given Fraher the opportunity to speak more freely about her experience. The former executive welcomed this change, stating that it would allow for greater transparency in enforcement actions.