U. S. will begin checking against Silvergate in FTX case
2023.02.03 02:44
U. S. will begin checking against Silvergate in FTX case
By Tiffany Smith
Budrigannews.com – The involvement of the cryptocurrency bank Silvergate with the doomed FTX exchange and its affiliates is said to be the subject of an investigation by the fraud unit of the United States Department of Justice.
According to a Bloomberg report from February 3, which cited “people familiar with the matter,” the investigation is looking into Silvergate’s hosting of accounts linked to the businesses of former FTX CEO Sam Bankman-Fried.
Although the crypto bank in California is not accused of any crime, investigators are attempting to determine how extensive the interactions with FTX and Alameda were.
The collapse of FTX in November had a significant impact on Silvergate, which reported a loss of $1 billion during the previous quarter. Following the demise of the SBF empire, the bank disclosed that it had taken out billions of dollars in loans to avoid a liquidity crisis and a bank run. It also laid off 40% of its employees.
The federal investigators are attempting to determine whether Silvergate and any other FTX-related businesses knew about the situation.
Silvergate claims that Alameda opened an account with the bank in 2018, prior to the introduction of FTX. According to the report, it asserts that it carried out ongoing monitoring and due diligence at the time.
A representative of the bank stated this week that the organization “has a comprehensive compliance and risk management program.”
Josh Rager, a cryptocurrency trader, offered his thoughts on the potential consequences that this most recent criminal investigation may have on cryptocurrency exchanges that are associated with Silvergate.
Cryptocurrency exchanges are likely to suffer as a result of the DOJ fraud investigation in Silvergate.
Funny how they always time these announcements 🙂 pic.twitter.com/7WxJYFawuF
Silvergate’s dividends were halted on January 27 due to “recent volatility in the digital asset industry.” At the time, it claimed to have a “cash position in excess of its digital asset customer-related deposits.”
According to MarketWatch, Silvergate stock has lost 13% on the day, falling to $17.14 in after-hours trading. In addition, SI prices are currently 92% lower than they were in November 2021, when they reached their all-time high of $220.
