Sen. Elizabeth Warren D-Mass. Sen. John Kennedy R-La. Senator Roger Marshall R-Kan. and Sen. Roger Marshall R-Kan. have questioned the bank's involvement in enabling transfers between the now-bankrupt FTX FTT USD and its sister company, Alameda Research.
After FTX declared bankruptcy, allegations were made that its former CEO, Sam Bankman-Fried, had moved considerable amounts of customers' money from the trading platform to Alameda, a firm he owned.
The investment world is not happy about Silvergate's participation in this action because of the letter from the legislators on Monday.
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According to a bankruptcy filing, approximately 20 distinct accounts were maintained by FTX and its associated entities as part of Bankman- Fried's criptodomain.
The letter said Bankman- Fried secretly transferred $10 billion of customer funds to his trading vehicle, Alameda Research, to fund risky bets, violating both U.S. securities laws and FTX's terms of service. It said we are concerned about Silvergate's role in these activities because of reports that Silvergate facilitated the transfer of FTX customer funds to Alameda. The bank has until December 19 to respond to the senators.
Silvergate did not respond immediately to Benzinga's query.
The price action: Silvergate shares have dropped over 50% since the FTX collapse, and on Tuesday morning, depreciated an additional 6.15%, hitting a 52 week minimum, trading at $23.10, according to data from Benzinga Pro.
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