US lawmakers seek answers from Silvergate about FTX link

In response to the collapse of FTX and the arrest of its former CEO Sam Bankman-Fried, US Senators Elizabeth Warren and Sheldon Whitehouse have called for the Justice Department to investigate the matter and consider prosecuting individuals who may have played a role in the downfall of FTX.

Following the FTX crash, several US senators, including Warren, Roger Marshall, and John Kennedy, sent a letter to Silvergate Capital — the parent company of Silvergate Bank — seeking answers about Silvergate’s connection to the crisis.

According to a Jan. 31 Bloomberg report, the senators said Silvergate had not fully answered questions in response to a December letter about its alleged role in handling the cryptocurrency exchanges‘s  user funds. Silvergate reportedly cited restrictions on disclosing “confidential supervisory information” — a rationale the senators said was unacceptable, noting:

Both Congress and the public need and deserve the information necessary to understand Silvergate’s role in FTX’s fraudulent collapse, particularly given the fact that Silvergate turned to the Federal Home Loan Bank as its lender of last resort in 2022.”

The senators claim that Silvergate has not fully answered questions posed in a previous letter sent in December and call for transparency on Silvergate’s role in the FTX collapse, particularly considering that the company sought aid from the Federal Home Loan Bank during the crisis. The senators have given Silvergate until February 13 to provide a full response on its involvement with FTX and its due diligence practices.

The recent developments are part of ongoing congressional investigations into the FTX crash. In December, US senators and members of the House of Representatives conducted a series of hearings exploring the matter and considering legislative action to prevent similar incidents in the future.

The congressional investigation is expected to continue in 2023, with leadership suggesting that the fallout from the FTX crash will be a significant focus for lawmakers in the coming months.

Related Articles

El Salvador’s Hilton Hotel Ventures into Tokenised Debt on BTC

A minimum $1,000 investment will need to be made by investors to purchase the token, which will be issued on the BTC layer 2 network.

Bitcoin Mining Difficulty Hits Record High Ahead of Halving

Bitcoin mining difficulty and hash rate continue to increase ahead of the halving, a significant event expected to occur in eight days.

Bitcoin Halving Impact Fades as Demand Takes Center Stage

According to reports, the Open Interest in Bitcoin is now 30 times higher than it was 11 days before the 2020 Bitcoin halving.

Kraken Announces Delisting of Privacy Token Monero in Ireland and Belgium

Monero users' balances on Kraken after the deadline will have their coins automatically converted into Bitcoin.

See All