US Senators Elizabeth Warren and John Kennedy, as well as Congressman Roger W. Marshall, have written to Silvergate Capital Managing Director Alan Lane requesting information about FTX and other cryptocurrency companies.
Specifically, the letter states that they are seeking information on the relationship between Silvergate Bank and several cryptocurrency companies founded by Sam Bankman-Fried, including Alameda Research LLC, FTX US, and FTX Trading Ltd.
The senators state that after “FTX’s shocking collapse, disturbing new allegations about the company’s business practices continued to surface.” They point to reports that Bankman-Fried secretly transferred approximately $10 billion in client funds to its trading vehicle, Alameda Research, to fund risky bets, “violating both U.S. securities laws and FTX’s own terms of service.”
“We are concerned about Silvergate’s role in these activities due to reports suggesting that Silvergate facilitated the transfer of FTX customer funds to Alameda,” the letter read.
The letter also questions Silvergate’s awareness of reporting suspicious activity by its customers as required.
“Your bank’s involvement in the transfer of funds from FTX customers to Alameda reveals what appears to be a gross breach of your bank’s responsibility to monitor and report suspicious financial activity by its customers,” the letter added.
Silvergate has until December 19 to respond.
By Sam Boughedda