The U.S. Department of Justice is probing Silvergate Capital over its dealings with FTX and Alameda Research, according to a Feb. 2 report from Bloomberg.
Silvergate Bank has reportedly not been accused of wrongdoing, and the investigation could conclude without any charges being filed against the firm.
The DOJ has not officially announced the probe. Instead, Bloomberg obtained information about the confidential probe from anonymous sources.
Silvergate downplayed its exposure to FTX at the time of the latter company’s collapse in November. However, the bank’s ties to FTX and Alameda soon became more scrutinized. In December, U.S. senators suggested a Silvergate account was at the center of the FTX collapse. More recently, reports suggested that Silvergate received a $4.3 billion loan from the Federal Home Loan Bank during a bank run that followed FTX’s collapse.
Earlier this week, senators launched an inquiry to discover whether Silvergate was fully aware of FTX’s improper activities and mismanagement of funds. That renewed effort resulted from Silvergate’s failure to answer similar questions in December.
It is unclear whether the senators’ recent inquiries led directly to today’s DOJ probe. It is also unclear exactly which, if any, of the links between Silvergate and FTX described above are under investigation as part of the supposed probe.
The harsh, post-FTX crypto market has additionally impacted Silvergate in a more general sense. This month, the company laid off 40% of its staff, or 200 employees.
Source: https://cryptoslate.com/doj-probes-silvergate-over-ftx-alameda-ties/