Analysis of Silvergate Capital's FTX and BlockFi Public Letters

Silvergate CEO Alan Lane clarified that Silvergate operates under the Bank Secrecy Act and USA Patriot Act – requiring Silvergate to determine the owner, source of funds and purpose of funds on their platform. Historically, Silvergate flags unexpected activity and shuts down accounts that violate their expected usage agreements. The level of compliance creates a high barrier to entry, with onboarding taking multiple weeks as Silvergate's team collects and reviews the necessary documentation from potential clients.

The Bank Secrecy Act (BSA) requires U.S. financial institutions to aid the government in detecting and preventing money laundering. Requirements include: