SEC sues Silvergate Bank

The U.S. regulator filed charges against Silvergate Bank yesterday, Monday, July 7, for securities fraud. This is according to a press release from the SEC. According to them, the crypto-friendly bank allegedly failed to monitor transactions worth a trillion dollars according to the rules. In addition, Silvergate allegedly misled the public, according to the SEC.

The authority accuses the bank of concealing deceptive transactions from crypto exchange FTX, which collapsed in November 2022. Silvergate allowed payments to FTX worth nine billion dollars without further controls.

In March of this year, FTX boss Sam Bankman-Fried was sentenced to 25 years in prison in the US. The charges: conspiracy, money laundering and fraud against his customers. From these customers alone, Bankman-Fried allegedly stole US$8 billion, according to the court.

The SEC alleges that Silvergate wanted to hide these transactions after the collapse. Members of management, who would have to pay up to a million US dollars in fines, have also been charged with fraud. Silvergate agreed with the regulator on a $50 million fine.

The California-based bank reported its own bankruptcy in March 2023, shortly after Silicon Valley Bank closed. The crypto-friendly bank had suffered heavy losses due to the collapse of FTX and the collapse of its share price.