According to recent reports, several US senators have written a letter to Silvergate Capital, the parent organization of Silvergate Bank, demanding information that the institution is “withholding” about the disappearance of crypto exchange FTX.
Senators and House members held hearings
Senators including Republican John Kennedy, Democrat Roger Marshall and Republican Elizabeth Warren are reportedly investigating Silvergate over his connections to FTX in a letter that wrote to the bank.
US senators questioned crypto bank Silvergate Capital Corp. over alleged misappropriation of client cash by insolvent exchange FTX after calling the firm’s earlier comments “evasive.”
The senators claimed that Silvergate refused to fully respond to relevant inquiries in December due to bans on disclosing “secret supervisory information.”
According to the senators, the company omitted vital details needed to assess Silvergate’s involvement in the alleged fraud at FTX, including whether the exchange handled the transfer of client assets to Alameda incorrectly.
The letter, which bears the signatures of Warren, Marshall and Kennedy, gives Silvergate until December 19 to answer questions from Congress about its role in the FTX scandal.
Warren and Senator Sheldon Whitehouse urged the Justice Department to investigate the cryptocurrency exchange’s collapse and consider bringing certain individuals to justice after FTX’s liquidity problem and bankruptcy filing in November 2022 and before the former’s arrest. CEO Sam Bankman-Fried.
Silvergate had until February 13 in the most recent letter to respond, including information about the company’s due diligence procedures.
The startup has been struggling due to the FTX crash, reportedly initiate a 40% job reduction after reporting a $1 billion net loss in the fourth quarter earlier this month.
US House of Representatives regroups for FTX investigation
After Republican members of the House could not agree on who should be the next speaker for days, putting off committee assignments and legislation, members of Congress have been preparing for their 118th session.
Senators and House members held hearings to look into FTX’s disappearance in December, with leaders indicating the investigation would continue into 2023.
