• The U.S. Department of Justice has launched a probe into Silvergate Capital Corp. over its dealings with bankrupt crypto firm FTX and its sister concern Alameda Research.
• Federal prosecutors in the DoJ’s fraud section are conducting a criminal probe into the bank’s dealings, especially those with FTX and Alameda Research
• Silvergate could potentially be charged in light of the current environment and the anti-crypto sentiments among most U.S. government departments.
U.S Department of Justice Launches Probe Into Silvergate Capital Corp.
The United States Department of Justice has launched a probe into Silvergate Capital Corp. and its dealings with bankrupt crypto firm FTX and its sister concern Alameda Research. Prosecutors are examining the operations of Silvergate Captial Corp., which was one of the chief backers of FTX, as customers withdrew deposits totaling $8 billion after the crypto exchange collapsed, resulting in a net loss for the bank of $1 billion in the fourth quarter of 2022.
Criminal Probe Underway
Federal prosecutors in the DoJ’s fraud section are conducting a criminal probe into Silvergate’s dealings, particularly those involving FTX and Alameda Research, as well as their parent company’s risk management practices. The collapse of FTX’s ecosystem caused major trouble for Silvergate; as it had been hosting several accounts tied to businesses associated with FTX founder Sam Bankman-Fried, resulting in shares losing 88% of their value in 2022 and 40% premarket trading down since then due to increasing scrutiny from government bodies and policymakers.
Could Silvergate Be Charged?
Although no charges have been brought against Silvergate at this time, that possibility is still on the table due to growing anti-crypto sentiments among most U.S government departments as well as being requested by a bipartisan group of United State Senators for details concerning its risk management practices related to dealing with FTX and Alameda research firms..
Silvergates Struggles
Silvergates rise began when it went public in November 2019 following becoming significant feature as a bank for crypto companies that were turned down by traditional banking service providers; however since then it has suffered considerable losses due to customer withdrawals alongside increasing pressure from government bodies such as DOJ leading investors to become wary .
Conclusion
Although no charges have currently been brought up against them ,it remains possible that they may be charged due to changing political climate & rising anti crypto sentiment within US govt departments .