US Senators Demand Answers from Silvergate Capital Corp Over FTX’s Misuse of Customer Funds
US senators have turned their focus to Silvergate Capital Corp. yet again, saying that the company’s responses to a previous inquiry over its ties to the fallen FTX exchange were “evasive and incomplete.”
According to Bloomberg, senators from both sides of the aisle are demanding to know whether the parent company of crypto-focused Silvergate Bank knew about FTX’s misuse of customer funds.
The questions were sent in a letter to Silvergate’s Chief Executive Officer Alan Lane on Monday by, among others, Democrat Elizabeth Warren and Republicans Roger Marshall and John Kennedy. The senators argued that,
“The firm in December had declined to fully answer related questions, citing restrictions on disclosing “confidential supervisory information”,” Bloomberg wrote.
The senators reportedly argued in the letter that,
“This is simply not an acceptable rationale. […] Both Congress and the public need and deserve the information necessary to understand Silvergate’s role in FTX’s fraudulent collapse, particularly given the fact that Silvergate turned to the Federal Home Loan Bank as its lender of last resort in 2022.”
In early January, Silvergate said that it held $4.3 billion in short-term Federal Home Loan Bank advances and that it had some $4.6 billion cash and cash equivalents at the end of 2022 – which were put towards preventing a run on deposits following FTX’s collapse.
The senators gave Silvergate until February 13 to respond to its inquiries, including:
- answering if it knew that FTX was directing customers to wire funds to Alameda’s account at Silvergate;
- answering if it flagged any transactions as being suspicious;
- providing requested details on the firm’s due-diligence practices, the results of reviews conducted by the Federal Reserve and independent auditors,
- providing details on how it plans to use the proceeds from its Federal Home Loan Bank loan.
Following the senators’ December letter, the bank claimed that FTX’s parent company Alameda Research opened an account in 2018 prior – before FTX was founded, said Bloomberg, and that it was reviewing transactions involving accounts associated with FTX and Alameda.
However, the senators stated on Monday that, in its earlier response, the firm failed to include vital information that Congress needed in order to:
- assess the extent to which Silvergate is responsible for the improper transfer of FTX customer funds to Alameda,
- determine any compliance failures by the bank or auditors that could have enabled the alleged fraud.
Following this latest letter, a Silvergate representative claimed that the company has “a comprehensive compliance and risk management program” and that it did “significant due diligence” on both FTX and Alameda.
Earlier in January, as reported, US federal authorities confiscated approximately $700 million worth of assets belonging to the FTX founder Sam Bankman-Fried, including three accounts at Silvergate Bank that held US dollars.
US Prosecutors have charged the former CEO with eight criminal charges including wire fraud and conspiracy by misusing customer funds. Bankman-Fried pleaded not guilty to all charges.
– Is The Federal Home Loans Bank System Carrying Out a Stealth Rescue of the 2 Biggest Crypto Banks?
– Silvergate Loses $1 Billion But Stock is Up Because Numbers Show it is Not Going Bust Anytime Soon
– Silvergate Bank Suffers Run on Deposits as $8.1 Billion is Withdrawn – Will it Go Bust?
– Silvergate in Trouble: Crypto Bank Cuts Staff by 40% Amid a 68% Decline in Crypto Deposits
Source: crypto news
Ukrainian boxer Wladimir Klitschko, brother of Kyiv mayor, rips IOC for allowing Russians to compete
Melissa Joan Hart Breaks Down in Tears Describing Helping Kindergartners Run From Nashville School Shooting
Police: Army veteran killed by 14-year-old wrong-way driver driving stolen car in Dutchess County
Supply Chain Problems Persist For Automakers, Not Just Microchips
D.C. Council chair defends district schools called ‘crappy,’ ‘inmate factories’
Mediterranean Tofu Scramble Recipe | SELF
Remittances’ Shift To Digital: Driving Change In An Industry Split Between Yesterday And Tomorrow
Used Car Prices Down 8.7 Percent From Last Year, According To Study
Volkswagen Assets Frozen In Russia Over Contract Dispute
Chopped Greek Salad with Pistachios and Goat Cheese Recipe
‘Survivor 44’ Fans on Danny and Brandon Underestimating Carolyn, ‘Neither of Those Guys Are Winning’
High-ranking MBTA executive in charge of capital projects fired
Michelle Pfeiffer Hated Her Catwoman Suit in ‘Batman Returns’ and ‘Never Wanted to See It Again’
Boston man, daughters charged with allegedly attacking security guard at movie theater
‘Seeking Brother Husband’ Star Kim Says She’s Not a Fan of the Show’s Name
Sport15 hours ago
Florida Atlantic’s Dusty May recalls thinking he ‘just committed career suicide’ taking head coaching job
Travel15 hours ago
BA ADDS A TOUCH OF SPARKLE TO ITS CLUB WORLD CABIN WITH THE INTRODUCTION OF NEW ENGLISH WINES
Finance15 hours ago
Ethereum Core Developers Announce Date for Long-Awaited Shapella Upgrade – Here’s What You Need to Know
News15 hours ago
The Chemical Menace Inside Glaciers and Icebergs
Tech14 hours ago
With Amazon Alexa’s future in peril, Fire TVs offer a glimmer of hope
Tech15 hours ago
How a Senator’s Misguided Tweet Can Help Us Understand AI
Travel16 hours ago
Frontier Canada Releases 2023 Guide To The Great White North
Lifestyle15 hours ago
Rihanna Shares Glimpse at Her Delicious Pregnancy Cravings