Reported by Lydia Beyoud

Silvergate, the California lender done in by the collapse of crypto exchange FTX, agreed to pay $63 million to settle state and federal probes on Monday.

The Federal Reserve announced the penalties against the bank, owned by Silvergate Capital Corp. The Fed portion of the fine is $43 million, and the California Department of Financial Protection and Innovation makes up the remainder. The Securities and Exchange Commission also said it settledwith the lender. 

Silvergate didn’t admit to or deny claims made by the regulators.

“The settlements announced today, which will facilitate the surrender of Silvergate’s bank charter, are part of the bank’s continued orderly wind-down and successfully conclude investigations by the Federal Reserve, DFPI and SEC,” the company said in a statement. The bank added that it “made a responsible decision to liquidate voluntarily and without government assistance” in 2023, and that all deposits had been repaid to banking customers. 

SEC Claim

On Monday, the SEC said the lender would pay $50 million to settle claims of negligence-based fraud for misleading investors about its compliance. That amount could be offset by other penalties, according to the SEC.

“Because of those deficiencies, Silvergate allegedly failed to detect nearly $9 billion in suspicious transfers among FTX and its related entities,” Gurbir Grewal, the head of the SEC’s enforcement unit, said in a press release. 

The markets regulator also settled with former Silvergate Chief Executive Officer Alan J. Lane and former Chief Operating Officer Kathleen Fraher for $1 million and $250,000, respectively. 

Read full report: https://www.bloomberg.com/news/articles/2024-07-01/sec-sues-silvergate-bank-for-securities-fraud-in-federal-court?srnd=homepage-asia