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BREAKING: SEC Sues Silvergate Bank for Securities Fraud
Author:
Mete Demiralp
01.07.2024 – 19:44
Update:
5 seconds ago
According to breaking news from Bloomberg, the SEC has filed a securities fraud lawsuit against Silvergate Bank, which is heavily involved in the cryptocurrency sector.
The U.S. Securities and Exchange Commission (SEC) has taken legal action against Silvergate Capital, a California-based bank, accusing it of securities fraud. This lawsuit is linked to the collapse of the cryptocurrency exchange FTX, which had strong connections with Silvergate.
The SEC filed the lawsuit in federal court in Manhattan today. The complaint cites “securities fraud” as the primary allegation but does not provide additional specifics about the case. Several former executives of Silvergate have also been named as defendants.
Silvergate was one of the few traditional banks to engage with the digital asset industry during its early stages. This move, however, entangled the bank in the widespread turmoil that hit the cryptocurrency sector in late 2022 and 2023.
The bank had established itself by creating a payment system that allowed investors and digital asset companies to convert their US dollar deposits into digital assets. However, the downfall of FTX, a major player in the crypto exchange market, severely disrupted Silvergate’s operations.
The SEC’s lawsuit against Silvergate Bank is based on the bank’s involvement with FTX and its failure to adhere to regulations concerning crypto-related transactions.
*This is not investment advice.
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