The crypto-bank Silvergate continues to accumulate difficulties since the bankruptcy of FTX. After recently posting $1 billion in net losses for the last quarter of 2022 and laying off 40% of its staff, the California-based company is now under investigation by the United States Department of Justice over its ties to FTX and AlamedaResearch.
Silvergate placed under investigation by the US Department of Justice
According to information reported by our colleagues at Bloomberg, the United States Department of Justice has started an investigation against the crypto-bank Silvergate regarding the links it may have had with FTX and Alameda Research.
Specifically, individuals who wished to remain anonymous given the confidential nature of the survey indicated that authorities wanted to closely examine the accounts held by Sam Bankman-Fried and its companies within Silvergate.
It should be noted that Silvergate is currently not found guilty of anything, and it is therefore possible that the investigation will not lead to any charges. However, at the beginning of the week, a bipartisan group of US senators had previously sent a letter to Silvergate asking her for more details about the relationship she had with Sam Bankman-Fried, specifying in the missive that the answers previously given were “evasive and incomplete”.
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Consequently, the Californian crypto-bank continues to accumulate difficulties after suffering a bank run result of several billion dollars following the bankruptcy of FTX. Faced with this bitter observation, Silvergate found itself obliged to lay off 40% of its staff at the beginning of Januaryshortly before revealing that it had suffered $ 1 billion in net losses in the last quarter of 2022.
Regarding its links with FTX and Alameda, Silvergate had already announced that she was reviewing transactions involving the companies under the aegis of Sam Bankman-Fried and assures today in parallel that it had previously carried out due diligence processes before engaging with them.
In addition, the American bank is regularly audited by independent firms and is subject to annual reviews by the Federal Reserve, the central bank of the United States chaired by Jerome Powell. However, it is unlikely that Silvergate will be able to raise the bar, its share price having fallen by 88% over the last 12 months, and this added to the fact that it must now assume several billion dollars in loans.
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