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Unchained
Did Washington Crush Crypto’s Most Important Bank? Its Former Chairman Says Yes. - Ep. 780
Feb 7, 2025
Mike Lempres, former chairman of Silvergate Bank and experienced lawyer, reveals the dramatic journey of crypto's critical banking partner. He discusses how Silvergate grew by supporting major players, only to be upended after the FTX collapse. Lempres argues that political pressures in D.C. fueled their downfall, not regulatory issues. He delves into the implications of Operation Choke Point 2.0, suggests collusion between short sellers and politicians, and envisions a future for banks willing to embrace the crypto landscape.
51:21
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Quick takeaways
- Silvergate Bank's innovative approach with the Silvergate Exchange Network enabled it to scale rapidly within the crypto sector, underscoring the potential for tailored banking solutions.
- The fallout from the FTX collapse and shifting political dynamics led to a dramatic decline in Silvergate's deposits, exemplifying the precarious relationship between crypto and traditional banking.
Deep dives
The Risks of Banking in Crypto
Crypto companies face significant challenges in establishing banking relationships due to regulatory uncertainty. Many banks are reluctant to engage with crypto businesses because these institutions perceive a high level of risk without clear incentives for participation. Historically, banks have debanked crypto companies once they disclose their involvement in the sector, leading to a lack of trust and cooperation. This ongoing friction between banks and crypto firms highlights the need for better communication and understanding of the crypto industry's requirements.
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Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode