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An Obscure Bank Found Its Key to Success. Then FTX Collapsed

  • Lawmakers question Silvergate, bank to FTX, Alameda Research
  • Crypto offered a source of low-cost deposits for Silvergate


Source: Bloomberg

Updated on

Silvergate Capital Corp. was dealing with the same problem many small US banks face: How do you differentiate yourself when larger competitors do everything you do, only better?

The solution it found was to focus on a sector other banks didn’t want to touch: cryptocurrency. Over the course of a decade, the La Jolla, California-based company transformed itself from a bank catering to small businesses into a publicly traded firm known for providing banking services to major crypto clients such as Coinbase Global Inc. and Gemini Trust Co. — as well as Sam Bankman-Fried’s FTX and Alameda Research.