Silvergate Bank: Smoke on the Water Now Fire in the Sky

Auditchain
4 min readMar 4, 2023

Internal and Disclosure Controls at #Silvergate were deficient long before #FTX filed for bankruptcy. Deficiencies in IC and DC are always tell tale signs of impending doom as evidenced in the Declaration of John Jay Ray III in support of the bankruptcy of FTX.

We will prove this below. KEEP READING.

💡 The focus of Auditchain Labs AG is all about raising the integrity and reliability of global disclosure and assurance processes and the financial information articulated in such disclosures. KEEP READING

💡 On March 1, 2023, Silvergate Bank filed a Form NT-10K which is a request for an extension of time to file its annual report on Form 10K. ⚠ See NT-10K

⚠ Pursuant to the PART III — NARRATIVE ⚠ “The Company is working diligently to file its Form 10-K as soon as possible, but does not expect to be in a position to file the Form 10-K by the extension date of March 16, 2023”.

⚠ Furthermore, they state in PART IV — OTHER INFORMATION ⚠ “In addition, the Company is evaluating the impact that these subsequent events have on its ability to continue as a going concern for the twelve months following the issuance of its financial statements”.

💡 Auditchain Labs AG features Pacioli, an AI based logic and reasoning engine that acts as a validating node on the #AuditchainProtocol. It uses a semantic ontology to achieve provably accurate deficiencies in internal and disclosure controls. Pacioli proves the financial and operational state of an economic entity.

💡 #Pacioli was able to detect 32 inconsistencies in the financial statements filed with the SEC by #Silvergate for the period ending September 30, 2022.

💡 2 of the inconsistencies were the result of a failure by #Silvergate to perform correct and consistent calculations related to Stockholder’s Equity under #USGAAP.

💡 10 were related to calculations of its Summary of Loans detail under #USGAAP, specifically: “financing receivable excluding accrued interest before allowance for credit loss”. ☢

💡 An additional 20 inconsistencies were related to the outright failure to include mandatory disclosures. TOO MANY TO STATE ☢

💡 Investors and stockholders could have been more informed if they performed the analysis using the #AuditchainProtocol #Pacioli analysis tool. 💡They will very soon when the Auditchain Protocol launches and investors can become much better informed.

⚠ Regulators failed to protect investors by providing adequate specifications for assurance and financial disclosure for #banks and other reporting entities.

💡 CPAs and CFAs who review these outputs can confirm. ☑

💡 Here are the links to each of the output analysis:

Financial Statements for the period ending September 30, 2022

Financial Statements for the period ending June 30, 2022

Financial Statements for the period ending March 31, 2022

Financial Statements for the full year ending December 31, 2021

CFOs, controllers or CEOs who furnish financial disclosure who want to avoid this embarrassment should email info@auditchain.com.

Forward thinking accountants and professionals can become early adopters of the new Web3 accounting, financial reporting and assurance economy!

CALL FOR APPLICATIONS

Applications to subscribe are now being accepted for the first 250 public beta versions of Pacioli Node as a Service provided by blocz.

CLICK HERE TO APPLY NOW!

About Auditchain Labs AG

Auditchain Labs AG (https://auditchain.finance ) is the developer of the world’s first decentralized accounting, audit, financial reporting and analysis protocol that automates financial disclosure and provides proof of state validation on the world’s business and financial information. Auditchain Labs AG is a founding member of the DCARPE Alliance Association and is leading the development of the Auditchain Protocol with other members of the Alliance.

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About DCARPE Alliance Association

The DCARPE Alliance Association is a global organisation consisting of members of the accounting, audit, financial reporting, legal, blockchain, investment, standard setter and regulatory community. The purpose of the Alliance is to adopt standards, provide education, drive technology innovation and promote the adoption of continuous audit and real time digital financial reporting using the Auditchain Protocol.

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Written by Auditchain

Auditchain is a web3 financial disclosure protocol that raises the integrity and reliability of global business and financial information.