U. S. resumes questioning Silvergate in FTX case
2023.01.31 15:06
U. S. resumes questioning Silvergate in FTX case
By Tiffany Smith
Budrigannews.com – According to reports, a number of senators from the United States have written a letter asking Silvergate Capital, Silvergate Bank’s parent company, for clarification regarding the demise of cryptocurrency exchange FTX.
In response to a December letter about its alleged role in handling FTX user funds, U.S. senators Elizabeth Warren, Roger Marshall, and John Kennedy, according to a Jan. 31 Bloomberg report, Silvergate had not fully answered questions. The senators deemed Silvergate’s justification inadmissible, citing restrictions on disclosing “confidential supervisory information.”
According to Bloomberg, the letter stated that:
“both Congress and the public need and deserve the information necessary to understand Silvergate’s role in FTX’s fraudulent collapse, particularly given the fact that Silvergate turned to the Federal Home Loan Bank as its lender of last resort in 2022.”
Warren, Kennedy, and Marshall signed a letter from 2022 giving Silvergate until December 19 to answer questions from lawmakers about its role in the FTX mess. However, the senators reportedly claimed that the company had withheld crucial information that was required to determine Silvergate’s role in the alleged fraud that FTX was accused of, such as whether it had handled the transfer of FTX user assets to Alameda improperly.
Before the arrest of former CEO Sam Bankman-Fried and the liquidity crisis and bankruptcy filing of FTX in November 2022, Senator Sheldon Whitehouse and Senator Elizabeth Warren urged the Justice Department to investigate the collapse of the crypto exchange and consider prosecuting specific individuals. Silvergate had until Feb. 13 to respond, including a response on the company’s due diligence procedures, according to the most recent letter.
After Republican lawmakers in the House of Representatives were unable to reach a consensus to elect the next speaker for days, committee assignments and legislation were postponed, and members of Congress have been organizing for their 118th session. In December, senators and members of the House held hearings to look into the fall of FTX. Leadership at the time said that the investigation would continue in 2023.
