Banking

Crypto bank Silvergate asked by U.S. senators to describe FTX ties

The crypto bank Silvergate Capital Corp. was asked by 3 U.S. senators to launch all records about transfers of funds for the collapsed FTX empire of Sam Bankman-Fried.

“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,” Sens. Elizabeth Warren, Roger Marshall and John Kennedy composed in a letter launched Tuesday. “The public is owed a full accounting of the financial activities that may have led to the loss of billions in customer assets, and any role that Silvergate may have played in these losses.”

Shares of the La Jolla, California-based bank fell as much as 8%. The slide extends Silvergate’s losses on the year to more than 84% and has it trading at a fresh 52-week low.

The letter points out issues about the banking services that Silvergate offered to both FTX along with Bankman-Fried’s trading company, Alameda Research. It states the plan in between FTX and Alameda depended upon Silvergate’s depository services and puts the bank “at the center of the improper transmission of FTX customer funds.”

“Silvergate’s failure to take adequate notice of this scheme suggests that it may have failed to implement or maintain an effective anti-money laundering program, as required under the Bank Secrecy Act,” the senators stated.

An agent from Silvergate Capital did not instantly react to an ask for remark from Bloomberg News.

Gabriel

A news media journalist always on the go, I've been published in major publications including VICE, The Atlantic, and TIME.

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