US checks Silvergate relationship with FTX
2022.12.06 10:53
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US checks Silvergate relationship with FTX
Budrigannews.com – According to reports, three senators from the United States have written a letter to Silvergate Bank in which they ask for details about the bank’s ties to FTX and the businesses run by former CEO Sam Bankman-Fried.
As indicated by a Dec. 6 report from NBC News, Legislators Elizabeth Warren, John Kennedy, and Roger Marshall sent a letter to Silvergate President Alan Path. In response to “new and disturbing allegations” regarding the bank’s business practices, lawmakers reportedly requested that the bank provide details regarding its relationship with FTX entities.
The lawmakers reportedly stated, “Your bank’s involvement in the transfer of FTX customer funds to Alameda reveals what appears to be an egregious failure of your bank’s responsibility to monitor for and report suspicious financial activity carried out by its clients.” Due to reports that Silvergate facilitated the transfer of funds from FTX customers to Alameda, we are concerned about its role in these activities.
Silvergate had until December 19 to respond to the letter. Warren reportedly suggested that Silvergate might be “at the center of the improper transfer of billions of FTX customer funds” and demanded that those responsible be held accountable. This was in line with the senator’s request to the Department of Justice in November to possibly bring criminal charges against those who were responsible for the collapse of FTX.
On December 5, possibly prior to the request for information, Lane issued a public letter in which he criticized “short sellers and other opportunists trying to capitalize on market uncertainty” with misinformation and speculation. According to NBC News, Lane claimed that the bank was the “victim” of FTX and Alameda Research’s “apparent misuse of customer assets and other lapses of judgment.” The CEO stated that Silvergate had “conducted significant due diligence on FTX and its related entities including Alameda Research” as part of its onboarding process and beyond.
“Silvergate conducted significant due diligence on FTX and its related entities, including Alameda Research, both during the onboarding process and through ongoing monitoring, in accordance with our risk management policies and procedures.” Read more here: https://t.co/9nAViJOzoi
— Silvergate Bank (@silvergatebank) December 5, 2022
The downfall of SBF and what, if any, legislative or regulatory solutions may be available to prevent a similar occurrence in the future are the subject of investigative hearings scheduled by Members of Congress. The House Financial Services Committee’s leadership has asked Bankman-Fried to testify in person or remotely at a hearing on December 13, but the CEO of FTX said he would wait until he had “completed learning and reviewing what happened.”
