Silvergate Bank's collapse earlier this year was due to over-reliance on risky crypto deposits and nepotism, according to a Federal Reserve review. The bank shifted its focus to crypto customers in 2013 and rapidly expanded, with deposits growing from $1 billion in 2017 to $16 billion by 2021. However, the majority of these deposits were uninsured and non-interest bearing. The bank's downfall became evident after the collapse of the FTX crypto exchange in November 2022. The Federal Reserve review also highlighted nepotism within Silvergate's senior management, which led to an ineffective corporate structure and failure to address risks.