🔥 FTX-Linked Bank Silvergate to Disburse Millions in Fines
posted 2 Jul 2024
Silvergate, a banking partner of the bankrupt entities FTX and Alameda, will pay fines totaling $63 million to the Federal Reserve and the California Department of Financial Protection and Innovation (DFPI). Of this sum, $43 million will be paid to the Fed and $20 million to the DFPI. Additionally, the SEC seeks to impose another $50 million in penalties on the company.
This settlement with regulators is a necessary step in the liquidation process of the bank, which collapsed following the failure of its major client, the FTX exchange.
A joint investigation by the SEC, Federal Reserve, and DFPI uncovered numerous violations of AML and KYC standards by Silvergate. The SEC also accused the bank and its former executives—CEO Alan Lane, COO Kathleen Fraher, and CFO Antonio Martino—of misleading investors about the financial health and reliability of its compliance programs.
Lane and Fraher have agreed to settle, paying $1 million and $250,000 respectively, and will be barred from holding executive positions for the next five years. Martino intends to contest the SEC's allegations in court.
Regulatory scrutiny of Silvergate's operations began in early 2023, focusing on its connections with the now-defunct FTX. In March 2023, the bank announced its voluntary liquidation.
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