In response to claims that the bank "facilitated the movement of FTX client cash to Alameda," three senators expressed worry about Silvergate.
The FTX Link
According to reports, Silvergate Bank has received a letter from three members of the US Senate asking for details on any connections between FTX and companies run by former CEO Sam Bankman-Fried (1). In reaction to "new and unsettling claims" regarding the bank's business operations, the MPs allegedly requested the bank for specifics on its relationship with FTX businesses.
The transfer of FTX client cash through your bank to Alameda discloses what looks to be an appalling failure on the part of your bank to keep an eye out for and report any questionable financial activity carried out by its customers," the senators allegedly added. "Reports imply that Silvergate enabled the movement of FTX client monies to Alameda, which has us concerned about Silvergate's participation in these operations."
“Silvergate conducted significant due diligence on FTX and its related entities, including Alameda Research, both during the onboarding process and through ongoing monitoring, in accordance with our risk management policies and procedures.” Read more here: https://t.co/9nAViJOzoi
— Silvergate Bank (@silvergatebank) December 5, 2022
A partner in Crime?
Silvergate was given until December 19 in a letter to respond. According to reports, Warren demanded that those responsible be held accountable and said that Silvergate may be "at the core of the unlawful transfer of billions in FTX client cash." This repeated the senator's November plea to the Department of Justice to perhaps bring criminal charges against those responsible for the demise of FTX.
On December 5, Lane made a public letter (2) available, perhaps earlier. Denouncing "short sellers and other opportunists seeking to profit on market volatility" with speculation and false information in response to the call for information. As part of its onboarding process and beyond, the CEO claimed Silvergate had "conducted considerable due diligence on FTX and its connected firms, including Alameda Research." NBC News confirmed this. Lane said that FTX and Alameda Research's "apparent abuse of customer assets and other failings of judgment" made the bank the "victim."
.@SBF_FTX,
— Maxine Waters (@RepMaxineWaters) December 5, 2022
Based on your role as CEO and your media interviews over the past few weeks, it’s clear to us that the information you have thus far is sufficient for testimony. (1/3) https://t.co/YUVVjOkC40
Congressmen have set hearings to look into what led to SBF's demise and what legislative or regulatory measures could be available to prevent a repeat of the situation. The House Financial Services Committee's leadership has asked Bankman-Fried to appear at a hearing on December 13 either online or in person. The FTX CEO said he would wait until he had "finished learning and assessing what transpired" before doing so in person.
