Silvergate Bank, a renowned institution that was closely associated with the cryptocurrency market before discontinuing its operations in March 2023, is now facing a lawsuit filed by the United States Securities and Exchange Commission (SEC).
The lawsuit, which was initiated on Monday, alleges that the bank’s leaders misled investors and failed to adequately supervise transactions amounting to approximately US$1 trillion. Notably, around US$9 billion of these transactions were conducted by FTX, one of the largest cryptocurrency exchanges at the time, which filed for bankruptcy in November 2022. Investigations have revealed that the fraudulent practices of Sam Bankman-Fried, the co-founder and CEO of FTX, and his associates played a significant role in the collapse.
It is important to note that the SEC’s legal action extends beyond the bank itself and also encompasses senior executives at Silvergate Capital Corporation. This includes former CEO Alan Lane, former COO Kathleen Fraher, and former CFO Antonio Martino, who are all facing allegations of multiple securities violations.
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