• The US Department of Justice has opened a probe into Silvergate Capital Corp. over its dealings with the bankrupt crypto firm FTX and its sister concern Alameda Research.
• Federal prosecutors are conducting a criminal investigation into Silvergate’s activities, which have come under increased scrutiny from policymakers after the FTX debacle in 2022.
• Silvergate was one of the main backers of FTX and has seen significant losses since it collapsed, leading to drastic layoffs and a drop in stock prices.

The US Department of Justice Investigates Silvergate

The United States Department of Justice has launched a probe into Silvergate Capital Corp. and its dealings with bankrupt crypto firm FTX and its sister concern Alameda Research. Prosecutors are conducting a criminal investigation into the bank’s operations, especially those with FTX and Alameda Research. This follows the collapse of FTX in 2022, which resulted in two-thirds of Silvergate’s customers withdrawing deposits worth over $8 billion.

Consequences For Silvergate

The fallout from the collapse of FTX had severe consequences for Silvergate, as it had been hosting accounts tied to businesses associated with Sam Bankman-Fried, founder of both firms. As such, their stocks lost 88% value in 2022 and 40% during premarket trading. To mitigate losses incurred by this event, Silvergate resorted to drastic layoffs as well as facing increased scrutiny from government bodies and policymakers alike.

Request From Senators

A bipartisan group of United States Senators recently requested details on risk management practices at the bank as well as further information on its dealings with FTX. This growing judicial scrutiny has created an atmosphere FUD among investors, leading to concerns that charges could be brought against Silvergate soon given current anti-crypto sentiment among U.S departments.

Silvergate’s Background

Prior to entering the crypto market in 2019, when it went public through an initial public offering (IPO), Silvergate was just another small US organization.. Its success led to it becoming known as one of few banks serving crypto companies turned down by traditional banking service providers; however this success eventually led to significant losses after the collapse of FTX in 2022 due to customer withdrawals worth $8 billion dollars resulting in layoffs for employees at silver gate capital corp .

Conclusion

Silvergate Capital Corp is now facing an uncertain future due to investigations being conducted by federal prosecutors regarding their involvement with both FTX and Alameda Research following their bankruptcy back in 2022 resulting in major financial losses for both companies involved as well as major layoffs due to customer withdrawals worth 8 billion dollars . The company may face charges if found guilty depending on current anti-crypto sentiments among U S departments or authorities