The U.S. Securities and Exchange Commission sued Silvergate Capital Corporation, pointing to transfers with FTX and accusing the crypto-friendly bank of making false statements to the public about its anti-money laundering procedures.
The crypto-friendly bank, which liquidated and shuttered its doors last year, was sued on Monday, according to a complaint filed by the SEC. The SEC also named the bank's CEO Alan Lane, former COO Kathleen Fraher and former CFO Antonio Martino.
Silvergate's Bank Secrecy Act and AML compliance program was not adequate, the SEC said. Specifically, the bank did not have appropriate measures in place to monitor the Silvergate Exchange Network, which allowed customers to transfer funds.
"But the Bank failed to adequately or automatically monitor for suspicious activity approximately $1 trillion in banking transactions that occurred on the SEN," the SEC said. "The Bank also failed to detect nearly $9 billion in suspicious transfers by FTX and its related entities."
Silvergate unraveled after posting in a regulatory filing that it may be "less than well-capitalized" and said it was "re-evulating its business." Coinbase, Circle, Paxos and Gemini, among other companies, then severed ties with the bank
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