US senators ask Silvergate about FTX insider knowledge

US senators ask Silvergate about FTX insider knowledge

A cohort of the United States Senate asks the Kryptobank Silvergate about their knowledge of the FTX fraud after they classified answers to previous surveys as "evasive" and "incomplete".

The senators suspect that Silvergate could have played a role in the illegal transmission of FTX user funds to Alameda Research about the accounts of the retail company at the bank.

silvergate and ftx

according to bnn bloomberg , sent a letter to Silvergate on Monday, in which they asked the bank about their connections to FTX. The Democrat Elizabeth Warren-a renowned crypto skeptic -and the Republican Roger Marshall and John Kennedy.

In the letter, the politicians said that Silvergate had rejected to answer similar questions in December because of "confidential supervisory information". This reason was not acceptable for the senators.

"This is simply not an acceptable reason", the senators wrote to Alan Lane, Chief Executive Officer from Silvergate. "Both the congress and the public need and deserve the information necessary to understand the role of Silvergate in the fraudulent collapse of FTX, especially in view of the fact that Silvergate turned to the Federal Home Loan Bank as the lender of the last instance."

Nevertheless, Silvergate may not be out of line: Sultan Meghji, former Chief Innovation Officer of the Federal Deposit Insurance Corp, said that banks could be liable for the disclosure of confidential supervisory information. He said the congress should work with the supervisory authorities to find the desired information. Silvergate's reluctance to open up in this situation "not surprising".

During his previous survey period, Silvergate said that it opened an account at Alameda in 2018, i.e. before FTX was founded. It also claimed to have carried out on Alameda and FTX DUE diligence tests while working with the companies.

The letter from Monday asked for details on the DUE diligence practices of Silvergate and the results of the annual exams of the Federal Reserve and other independent exams.

Kevin O’Leary, a former spokesman for FTX, has said that he and other investors have "rely on the duty of care" than they have embarked on the company, And that they think they are stupid afterwards.

Silvergate according to FTX

as FTX in November registered bankruptcy in November, his collapse triggered shock waves on the entire market, which met numerous large companies, including both blockfi and genesis. Silbertor claims his deposit relationship with blockfi was less than $ 20 million and it had not invested in the company.

but that does not mean that Silvergate does not feel the heat: the bank announced a 40 percent person in early January, during the planned purchase of Facebook Stablecoin project DIEM worth $ 196 million was scrapped. Es disclosed a net loss of $ 1 billion in the fourth quarter of 2022.

Silvergate is the bank, with which Microstrategy worked to record $ 205 million Bitcoin-secured loan in March last year. Bitcoin has fallen by over 50 % and forced Microstrategy to store more collateral to prevent liquidation.

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