Feb 3, 2023 11:47 UTC
Feb 3, 2023 at 11:47 UTC
Silvergate faces DOJ investigation over FTX and Alameda dealings Report
The crypto bank has n’t been indicted of wrongdoing, but prosecutors want to see how deep the dealings between the crypto bank and FTX went.
Crypto bank Silvergate is reportedly being probed by the United States Department of Justice fraud unit over its involvement with the void FTX exchange and its cells.
The inquiry is probing Silvergate’s hosting of accounts linked to former FTX CEO Sam Bankman- Fried’s businesses, according to a Feb. 3 report by Bloomberg, which cited “ people familiar with the matter. ”
The California- grounded crypto bank isn’t indicted of any crime, but investigators are trying to discover how deep the dealings with FTX and Alameda went.
Silvergate was heavily impacted by the collapse of FTX in November, reporting a$ 1 billion loss last quarter. The bank removed 40% of its staff and bared taking out billions of bones in loans to help a liquidity extremity and bank run following the fall of the SBF conglomerate.
The civil investigators are trying to ascertain whether Silvergate and any other companies working with FTX were apprehensive of the situation.
According to Silvergate, Alameda opened an account with the bank in 2018, before the launch of FTX. It claims to have conducted due industriousness and ongoing monitoring at the time, according to the report.
This week a bank representative said that the establishment “ has a comprehensive compliance and threat operation program. ”
Crypto dealer Josh Rager reflected on how this rearmost felonious disquisition may impact crypto exchanges with ties to Silvergate.
On Jan. 27, Silvergate suspended its tips, citing “ recent volatility in the digital asset assiduity. ” It maintained that it had a “ cash position in excess of its digital asset client- related deposits, ” at the time.
Silvergate stock has lost 13% on the day, tumbling to$17.14 in after- hours trading, according to MarketWatch. Likewise, SI prices were presently 92% down from their each- time high of $ 220 in November 2021.
Cointelegraph reached out to Silvergate for comment but hadn’t entered a response at the time of publication.