Silvergate's Former Risk Chief Settles SEC Case for $250K, Speaks Out After Gag Rule Lifted

Kate Fraher, Silvergate's former chief risk officer, settled with the US Securities and Exchange Commission in 2024 for a $250,000 civil penalty and accepted a five-year ban from serving as a company executive or board director. She made her first public comments on the case on Monday after the SEC rescinded its long-standing settlement "gag rule" that had restricted settled defendants from publicly denying allegations.

Fraher said she chose to settle to avoid a "multi-year battle" with the regulator and cited personal costs including being de-banked and having credit lines summarily closed. She stated that no financial agency proved Silvergate's anti-money laundering controls had failed and attributed the bank's 2023 wind-down to "broader administrative and regulatory pressure" against the digital asset industry rather than FTX-related deposit loss alone, despite the bank experiencing a 70% deposit run.