US senators want answers from Silvergate Capital on its involvement in FTX's alleged fraud, including due diligence practices.
Several United States senators have reportedly penned a letter requesting answers from Silvergate Capital — the parent company of Silvergate Bank — related to the collapse of cryptocurrency exchange FTX.
According to a Jan. 31 Bloomberg report, U.S. Senators including Elizabeth Warren, Roger Marshall and John KennedySilvergate had not fully answered questions in response to a December letter about its alleged role in handling FTX user funds. Silvergate reportedly cited restrictions on disclosing “confidential supervisory information” — a rationale the senators said was unacceptable.
“Both Congress and the public need and deserve the information necessary to understand Silvergate’s role in FTX’s fraudulent collapse, particularly given the fact that Silvergate turned to the Federal Home Loan Bank as its lender of last resort in 2022,” said the letter, according to Bloomberg.giving Silvergate until Dec. 19 to provide lawmakers answers on its involvement in the FTX debacle.
Following the liquidity crisis and bankruptcy filing of FTX in November 2022 — and prior to the arrest of former CEO Sam Bankman-Fried — Warren and Senator Sheldon Whitehouse to investigate the collapse of the crypto exchange and consider prosecuting certain individuals. The recent letter gave Silvergate until Feb. 13 to submit a response, including on the company’s due diligence practices.
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