• The United States Department of Justice (DoJ) has launched a probe into Silvergate Capital Corp. and its dealings with the bankrupt crypto firm FTX and its sister concern Alameda Research.
• Federal prosecutors in the DoJ’s fraud section are conducting a criminal probe into the bank’s dealings, especially those with FTX and Alameda Research.
• Silvergate Bank has had to resort to drastic layoffs to mitigate damages incurred by it due to customer withdrawals, resulting in a net loss of $1 billion for the bank in Q4 2022.

Probe Launched Into Silvergate Capital Corp.

The United States Department of Justice (DoJ) has launched a probe into Silvergate Capital Corp. and its dealings with the bankrupt crypto firm FTX and its sister concern Alameda Research. This comes after the FTX debacle of 2022, which has continued to have consequences across the industry, including on certain firms in the TradFi sector, as well as inciting action from government bodies such as charging CEOs of FTX and Alameda Research with fraudulent activities.

Criminal Probe Underway

An inside source has reported that DoJ is now looking into operations of Silvergate Captial Corp., parent company of the fintech and crypto-focused Silvergate Bank. This was one of chief backers of FTX, witnessing over two-thirds customer base withdrawing deposits worth over $8 billion after exchange collapse – resulting in net loss of $1 billion for bank in fourth quarter 2022. As result, company’s shares lost 88% value 2022 and were down 40% premarket trading – causing bank resorting drastic layoffs mitigate damages incurred by it due customer withdrawals.

Increasing Judicial Scrutiny

Silvergate Bank has been facing increasing scrutiny from government bodies and policymakers – for example federal prosecutors in DoJ’s fraud section conducting criminal probe into bank’s dealings especially those with FTX & Alameda Research; even prompted bipartisan group US Senators requesting details risk management practices & further information on dealings with FTX. Moreover anti-crypto sentiments among most US government departments adding weight judicial scrutiny weighing down Silvergate performance creating FUD wary investors – leading possibility eventuality charges brought against them eventually despite no charges thus far.
The collapse of the FTX ecosystem spelled major trouble for Silvergate, as it had been hosting several accounts tied to several businesses associated with FTX founder Sam Bankman-Fried

Silvergage BeforeFTX Collapse

Silvergate used to be small US organization till going public November 2019 soon entering crypto market becoming significant feature bank crypto companies turned down traditional banking service providers resulting shares reaching all time high April 2021 before collapse followed thereafter

Conclusion

It remains seen what will come out investigations conducted by DoJ & other federal agencies whether any charges brought against them however increasing judicial scrutiny certainly continuing weigh down performance create FUD investors warranting close monitoring progress situation future developments unfold