The U.S. Securities and Exchange Commission has sued Silvergate Capital Corporation, citing transfers with FTX and accusing the crypto-friendly bank of making false statements to the public about its anti-money laundering procedures.
Crypto-Friendly Banks be liquidated The bank, which closed last year, was sued on Monday, according to a complaint filed by the SEC. The SEC also named the bank’s CEO, Alan Lane, former COO Kathleen Fraher, and former CFO Antonio Martino.
The SEC found that Silvergate’s Bank Secrecy Act and AML compliance programs were inadequate. Specifically, the bank failed to take adequate measures to monitor the Silvergate Exchange Network, which allowed customers to transfer funds.
“However, the bank failed to adequately or automatically monitor for suspicious activity regarding approximately $1 trillion of banking transactions that occurred on SEN,” the SEC said. “The bank also failed to detect approximately $9 billion in suspicious transfers that occurred on FTX and its affiliated entities.”
Silvergate Capital, Lane, and Fraher agreed to settle with the SEC without admitting or denying the SEC’s allegations. Martino did not agree to the settlement. According to the SEC, Silvergate agreed to pay a $50 million fine, while Lane and Fraher agreed to pay $1 million and $250,000, respectively, and agreed to a permanent injunction.
According to the SEC, the Federal Reserve and the California Department of Financial Protection and Innovation also announced that they had reached an agreement to prosecute.
“After the collapse of FTX, one of Silvergate’s largest banking clients, they doubled down on misleading investors about the soundness of their compliance program, rather than being upfront with investors about the serious deficiencies in their compliance program,” said Gurbir Grewal, director of the SEC’s Division of Enforcement. name. “In fact, these flaws reportedly allowed Silvergate to miss nearly $9 billion in suspicious transfers between FTX and related entities.”
Silvergate did not immediately respond to The Block’s request for comment.
Silvergate was solved as follows: electricity In a regulatory filing, it said it “may not have sufficient capital” and was “re-evaluating its business.” Companies including Coinbase, Circle, Paxos and Gemini have since cut ties with the bank.
Updated on July 1st at 8:45 PM UTC to include payment details.
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