After the FTX/Alameda fiasco, the U.S. Justice Department’s Fraud Unit launched a Silvergate investigation bank. Prosecutors examine bank’s dealings with exchange FTX and the fund Alameda Research. But just recently, Silvergate was put on the spot by US senators for its role in the mismanagement of client funds. FTX. News of the investigation led to a fall more than 20% of the course of thestock of the company when the latter was already not doing well recently.
DOJ investigates Silvergate transactions with FTX and Alameda Research
silver gatethe famous bank favorable to crypto currencies which found itself in the fallout from the collapse of FTXis now the subject of a criminal investigation by US authorities. The U.S. Department of Justice reportedly launched this investigation into the bank’s dealings with the stock exchange. crypto currencies bankrupt, FTXand its sister company Alameda Research. Prosecutors are looking into the bank’s hosting of accounts associated with the bankrupt crypto empire of Sam Bankman-Fried. The report states that the bank has not been accused of any wrongdoing and that the investigation could be completed without the prosecutors do not file charges against the company.
The announcement of the DOJ investigation led to a fall of more than 20% in the price of Silvergate Capital stock during the exchanges. It came just hours after the stock price rallied almost 50% thanks to asset management giantassets State Street who increased his stake in the company to 75%. News of the criminal investigation comes just days after US senators sent a strong letter to the CEO of Silvergate Capital for answers about the bank’s role in the careless management of the funds of FTX customers and the failure of the company’s risk management and due diligence measures.
Silvergate’s dealings with FTX under investigation
The January 31 report mentioned that several american senators seek to obtain Silvergate Capital new details about his knowledge of the wrongdoings of FTX. Among the senators responsible for the investigation is the famous cryptocurrency critic Elizabeth Warrenas well as Roger Marshall and John Kennedy. The group of senators asked Silvergate to reveal whether the bank knew that FTX was transferring client funds to Alameda’s account at silver gate and whether it had reported any suspicious transactions. They also asked Silvergate about its due diligence process and the results of external reviews and audits.
The senators noted that silver gate secured a $4.3 billion loan from the Federal Home loan bank – a government-sponsored banking system – after the collapse of FTX end of 2022. They added that Silvergate relied on the bank as a lender of last resort. The group of senators asked Silvergate how it intended to use this loan. Although silver gate invoked confidentiality rules at the time, she revealed that her relationship with Alameda Research predated the formation of FTX and reviewed transactions related to both companies. silver gate has until February 13 to answer the final set of questions.
The article DOJ investigates crypto exchanges between Silvergate and FTX/Alameda appeared first on Corner Academy
