Three members of the United States Senate have reportedly written a letter to Silvergate Bank asking for information about any ties to FTX and business units under former CEO Sam Bankman-Fried.
According to a Dec. 6 report by NBC News, Senators Elizabeth Warren, John Kennedy and Roger Marshall sent a letter to Silvergate CEO Alan Lane. Lawmakers reportedly asked the bank to provide details of its relationship with FTX companies in response to “new and disturbing allegations” about its business practices.
“Your bank’s involvement in the transfer of FTX customer funds to Alameda reveals what appears to be a egregious failure of their responsibility to monitor and report suspicious financial activity by their customers,” lawmakers reportedly said. “We are concerned about Silvergate’s role in these activities as reports suggest that Silvergate facilitated the transfer of FTX client funds to Alameda.”
The letter gave Silvergate until December 19 to send a reply. Warren reportedly said Silvergate “could be at the center of the improper transfer of billions of FTX customer funds” and called on those responsible to be held accountable. This mirrored the senator’s request in November for the Justice Department to potentially prosecute individuals involved in wrongdoing in FTX’s collapse.
Lane published a public letter on Dec. 5 – presumably before the RFI – in which he criticized “short sellers and other opportunists trying to capitalize on market uncertainty” with speculation and misinformation. The CEO said Silvergate “conducted significant due diligence at FTX and its affiliates, including Alameda Research,” as part of its onboarding process and beyond, with NBC News reporting that Lane said the bank did “Victims” of FTX and Alameda Research’s “apparent misuse” of client assets and other misjudgments.”
“Silvergate has conducted extensive due diligence on FTX and its affiliates, including Alameda Research, both during the onboarding process and during ongoing monitoring in accordance with our risk management policies and procedures.” Read more here: https:// t.co/9nAViJOzoi
– Silvergate Bank (@silvergatebank) December 5, 2022
Related: Despite endless media appearances, SBF is unlikely to testify on December 13th
Members of Congress have scheduled investigative hearings to investigate the sinking of SBF and what legislative or regulatory solutions, if any, might be available to prevent a similar event in the future. House Financial Services Committee leadership has urged Bankman-Fried to testify either remotely or in person at a hearing on Dec. 13, but the FTX CEO suggested waiting until he “starts learning and verifying what.” happened, is done”.