U.S. Senators Probe Silvergate Capital's Crypto Dealings

Senators Demand Transparency from Silvergate Capital

U.S. Senators Elizabeth Warren and John Kennedy, along with Congressman Roger W. Marshall, have raised concerns regarding Silvergate Capital's involvement with several crypto firms. They specifically seek details about Silvergate Bank's connections to companies founded by Sam Bankman-Fried, such as Alameda Research LLC, FTX US, and FTX Trading Ltd.

Allegations of Misconduct

The inquiry follows the collapse of FTX, which has unveiled troubling allegations about its business practices. Reports suggest that Bankman-Fried transferred approximately $10 billion of customer funds to Alameda Research, breaching U.S. securities laws and FTX's terms of service. This has raised questions about Silvergate's role in these transactions.

Concerns About Silvergate's Oversight

The Senators express concern over Silvergate's potential facilitation of fund transfers from FTX to Alameda. The letter questions whether Silvergate adequately reported suspicious activities, as required by regulatory standards. This situation highlights what the Senators describe as a significant failure of Silvergate's responsibility to monitor and report questionable financial activities conducted by its clients.

Deadline for Silvergate's Response

Silvergate Capital has been given a deadline of December 19 to respond to these inquiries. The outcome of this investigation could have significant implications for the bank and its practices in handling crypto-related transactions.