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Silvergate Capital was fined $43 million for failing to monitor bank transactions in accordance with anti-money laundering laws, according to a statement from the Federal Reserve.
The statement said that the California Department of Financial Protection and Innovation coordinated with the Federal Reserve to make a similar decision, and Silvergate Capital was fined a total of $63 million.
SEC files lawsuit over ‘fraud’
On the other hand, the U.S. Securities and Exchange Commission (SEC) also filed a lawsuit against Silvergate Capital, its former Chief Executive Officer (CEO) Alan Lane and Chief Risk Officer Kathleen Fraher, alleging that they misled investors in anti-fraud. – Launching money laundering regulatory compliance programs and cryptocurrency customer monitoring, including FTX.
Silvergate Capital, Lane and Fraher were accused of “negligent fraud,” according to the SEC’s complaint filed in the Southern District Court of New York.
The SEC noted in its statement that Antonio Martino, the former chief financial officer of Silvergate Capital, was sued for misleading investors about losses from expected securities sales following the collapse of FTX.
The statement said that Silvergate Capital’s automatic transaction monitoring system failed to monitor more than $1 trillion in transactions by customers on the bank’s payment platform, the Silvergate Exchange Network, and claimed that Silvergate was unable to detect about $9 billion in suspicious transactions between FTX and related organizations.
Silvergate Bank’s parent company, Silvergate Capital, was negatively affected by the bankruptcy of cryptocurrency exchange FTX and decided to cease operations and voluntarily liquidate the bank in March 2023.
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