Silvergate’s FTX and Alameda Research Dealings Face Fraud Investigation

In the United States, the prosecutors of the Ministry of Justice, who specialize in investigating cases related to fraud, have begun to study the details of the conclusion of transactions of the crypto bank Silvergate with the FTX crypto exchange and the Alameda Research company.

Silvergate's FTX and Alameda Research Dealings Face Fraud Investigation


The Anti-Fraud Department of the US Department of Justice has launched a criminal investigation into the placement of accounts in Silvergate that relate to a business that stopped due to the declaration of bankruptcy in November last year.

Currently, the investigation process is at an initial stage. Prosecutors have not yet announced any charges against the crypto bank. After the media reports about the start of the criminal investigation, the value of Silvergate shares fell by more than 20% within a few hours. But then this indicator recovered, returning to the previous values.

After the FTX bankruptcy announcement, the crypto bank faced serious problems. Silvergate held deposits for FTX and Almeda Research. After the collapse of the crypto exchange, the bank’s customers withdrew more than $ 8 billion in digital assets from deposits.

Due to the massive withdrawal of digital funds, Silvergate found itself in a difficult position. The bank’s management has decided to sell assets with a total value of $ 5.2 billion. The implementation of this decision led to losses but allowed to cover expenses and maintain liquidity.

According to the results of the fourth quarter of last year, Silvergate recorded a loss of $ 1 billion. Also, due to the difficult situation, the bank had to make a painful decision to reduce 40% of its workforce. The layoffs affected 200 of Silvergate’s then-employees.

Earlier in January, the bank announced the termination of providing services to some customers. This decision was justified by the fact that a financial institution needs to optimize its activities in order to cope with the negative consequences of the collapse of FTX.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.