Silvergate Bank didn’t adequately monitor $1 trillion in crypto transactions, SEC says

Silvergate Bank, once a cornerstone of the crypto financial world until its collapse in early 2023, defrauded its investors by lying about its anti-money laundering controls and misleading investors about how the fallout from the FTX collapse would affect it, the Securities and Exchange Commission says in a lawsuit. Also named in the suit were the company’s chief executive officer, chief risk officer, and chief financial officer.

When FTX collapsed, the crypto industry panicked, leading to a run on Silvergate and a liquidity crisis. At that point, Silvergate’s chief financial officer Antonio Martino “engaged in a fraudulent scheme to mislead investors about the Bank’s dire financial condition,” the SEC alleges. Martino knew the bank had borrowed billions, which it would have to repay in January and February 2023.

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