Silvergate Faces DOJ Investigation Over FTX and Alameda Dealings: Report

The United States Department of Justice’s fraud bureau is apparently investigating cryptocurrency bank Silvergate for its participation with the defunct FTX exchange and its affiliates.

According to a Feb. 3 report by Bloomberg, the investigation is looking at Silvergate’s hosting of accounts tied to former FTX CEO Sam Bankman-enterprises. Fried’s

The California-based crypto bank has not been charged with any crime, but detectives are looking into how far the transactions with FTX and Alameda proceeded.

The collapse of FTX in November had a significant impact on Silvergate, which reported a $1 billion loss last quarter. Following the demise of the SBF empire, the bank laid off 40% of its workforce and admitted taking out billions of dollars in loans to avoid a liquidity crisis and bank run.

Federal agents are attempting to determine whether Silvergate and any other firms associated with FTX were aware of the issue.

According to Silvergate, Alameda opened an account with the bank before to the debut of FTX in 2018. According to the study, it claims to have done due diligence and continued monitoring at the time.

A bank spokesman stated last week that the company “has a sophisticated compliance and risk management programme.”

Josh Rager, a cryptocurrency trader, commented on how this fresh criminal probe may affect crypto exchanges with links to Silvergate.

Silvergate discontinued its payouts on January 27, citing “recent volatility in the digital asset business.” It claimed to have a “cash position in excess of its digital asset customer-related deposits” at the time.

According to MarketWatch, Silvergate stock has dropped 13% on the day, falling to $17.14 in after-hours trading. In addition, SI prices are presently 92% lower than their all-time high of $220 in November 2021.

Silvergate was contacted for comment by Cointelegraph but has not responded at the time of publication.