The DoJ’s fraud unit is probing Silvergate’s linkages with FTX and its trading arm Alameda, per Bloomberg. The crypto-friendly bank hasn’t been accused of any crime, but the Justice Department wants to know just how deep its ties with FTX ran. Silvergate’s shares fell more than 13% in premarket trading on Friday. Loading Something is loading.
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The US Justice Department is investigating Silvergate Capital’s ties with FTX and its trading arm Alameda Research, according to a report by Bloomberg.
The focus of the probe is on the bank’s hosting of accounts linked to the businesses of FTX founder Sam Bankman-Fried, according to the report, which cited people familiar with the matter. The lender has also come under pressure from US lawmakers to provide details on how much it knew about the irregularities at FTX.
Silvergate’s shares fell more than 13% in pre-market trading Friday.
Although the publicly traded bank hasn’t been accused of any wrongdoing and the probe could end without charges, the DoJ’s fraud unit wants to know just how deep its ties with FTX ran.
Silvergate has worked with more than a dozen crypto firms that have gone bankrupt, faced scrutiny or been under investigation, including FTX and Alameda.
When FTX had its customers wire money to seemingly-fake electronics retail website if they wanted to trade — an effort to hide funds used for Alameda investments — that bank account was with Silvergate.
This is not the first time the bank has been placed under the microscope. This past week, a bipartisan group of US senators in Congress sent a letter to Silvergate’s CEO that said the crypto-friendly bank was “evasive” when asked earlier about its role in the improper transfer of FTX customer funds to Alameda.