Silvergate Bank’s Collapse: Regulatory Pressure or Internal Struggles?

Silvergate Bank, once a leader in the copyright banking sector, decided to shut down last year, which sparked controversy in the copyright community. Nic Carter, a partner at Castle Island Ventures, argued that the bank’s downfall wasn’t merely due to internal issues but was a result of regulatory pressure aimed at suppressing copyright-friendly banks. Carter termed this as "Operation Choke Point 2.0," initiated under President Biden’s administration to stifle the growth of the copyright industry.

Carter highlighted that Silvergate’s collapse was largely influenced by a 15% cap on copyright deposits, which significantly impacted the bank's ability to thrive. This narrative isn't unique to Silvergate; other firms like Paxos Trust were also shaken following the closure of Signature Bank, causing instability within the copyright banking ecosystem.

Carter suggests that these regulations, rather than stabilizing the financial system, are pushing innovation away from the U.S., hindering the progress of the copyright sector. For more detailed insights, you can read the full blog here: Silvergate’s Collapse Linked to Regulatory Pressure.