SEC accuses Silvergate of misleading the public after FTX collapse
The post SEC accuses Silvergate of misleading the public after FTX collapse appeared on BitcoinEthereumNews.com.
The Securities and Exchange Commission has filed a lawsuit against Silvergate Bank. The regulator accused Silvergate, which officially closed and liquidated last year, of misleading clients and investors about the effectiveness of its compliance programs, including its anti-money laundering efforts. The suit names former CEO Alan Lane, former Chief Risk Officer Kathleen Freher and former Chief Financial Officer Antonio Martino as defendants, in addition to the bank itself. “SCC, Lane, and Fraher misrepresented the operational and legal risks facing the Bank by falsely stating in SEC filings and other public statements that the Bank had an effective BSA/AML compliance program tailored to the heightened risks posed by its crypto asset customers,” the SEC said in court documents. Read more: US Congressional research finds perception of crypto risk spurred bank withdrawals The bank, the SEC continued, claimed to have “conducted extensive due diligence and transaction monitoring related to those customers, including one of its now most notorious customers, FTX (the crypto asset trading platform that imploded in November 2022) and FTX’s related entities.” But the program was “inadequate.” The Silvergate staff were able to trace $9 billion worth of transfers from FTX-related entities in the review that happened less than a week after the collapse. “Most troubling to the BSA staff was the trend of funds that flowed from FTX’s custodial accounts — which held FTX customer funds — to a series of non-custodial FTX-related entities’ accounts, followed by transfers of these funds to other third parties — either through the SEN or to accounts external to the Bank,” lawyers for the SEC wrote. Following the review, Lane allegedly made a false or misleading statement in a letter posted to his LinkedIn and Twitter accounts, claiming that the bank took the BSA “very seriously” but the SEC said it never did…
Filed under: News - @ July 2, 2024 12:10 am