How Will the FTX Collapse Affect Silvergate? A Bear and a Bull Debate - Ep. 431

Ram Ahluwalia, CEO and cofounder of crypto-native investment advisor Lumida, and Marc Cohodes, individual investor and former hedge fund manager, have a heated debate about Silvergate, a crypto-friendly bank that plays a key role in integrating crypto with traditional finance and is currently under scrutiny due to its ties with FTX and Alameda. Both Marc and Ram have a vested interest in Silvergate. Marc is shorting the stock, while Ram is longing it.

 

Show highlights:

• why Silvergate plays such a vital role in the movement of money within the crypto industry
• whether Silvergate runs proper KYC and AML practices
• whether Silvergate has a $1 billion hole in its balance sheet
• whether regulators will go after Silvergate as they are doing with FTX
• why Marc thinks the FTX collapse wouldn't have happened without Silvergate 
• whether Silvergate was complicit with FTX’s activities or simply negligent 
• why Ram believes this case is different from JPMorgan's involvement with Madoff 
• what regulatory actions might come in the near future for Silvergate 
• why Ram thinks regulators will go to "great lengths" to avoid a bank failure
• what would it take for Ram and Marc to change their minds

 

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 Guests:

Ram:

• Twitter
• Ram’s thread on Silvergate
• Ram’s previous appearances on Unchained:
• Genesis May Be Facing Bankruptcy. Could It Take DCG Down With It?
• Why Genesis Could Very Well Be Insolvent, Not Just Illiquid

Marc:

• Twitter

 

Episode links:

• Class action lawsuit against Silvergate
• The Block: Silvergate CEO seeks to reassure investors over crypto contagion
• Letter from Senators Elizabeth Warren, John Kennedy, and Roger Marshall
• The Guardian: JP Morgan Chase to pay more than $2bn in penalties for Madoff ties
• The Financial Times: Silvergate: from tiny local lender to bank behind the crypto boom
• WSJ: Crypto Is Taking a Few Small Banks on a Wild Ride
• Bloomberg: 
• These Banks Were Left Holding the Bag in Crypto Implosion
• An Obscure Bank Found Its Key to Success. Then FTX Collapsed
• CoinDesk: Crypto Bank Silvergate Says Its BlockFi Digital-Asset Deposit Exposure Totals Less Than $20M
• New York Post: Crypto ‘smart’ money? Big traders fell for Sam Bankman-Fried
• NBC: Sen. Warren demands answers from Silvergate Bank about its business dealings with FTX
• Dylan LeClair’s Twitter thread

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