SEC Files Lawsuit Against Silvergate Bank Over Alleged Non-Compliance
The Securities and Exchange Commission (SEC) has filed a lawsuit against Silvergate Bank alleging securities fraud. The crypto-friendly bank failed to meet certain legal requirements, including provisions of the Bank Secrecy Act and anti-money laundering regulations. Former Silvergate executives have also been implicated in the lawsuit.
SEC Files Lawsuit Against Silvergate Bank
Financial Regular has filed a lawsuit against the crypto-friendly bank and its former executives over the events that led to its collapse in 2023. According to a filing on Monday, SEC flagged the bank’s previous actions, including failure to comply with certain regulations.
Silvergate failed to comply with the Bank Secrecy Act and anti-money laundering regulations, but made false statements to the public and shareholders that it was complying with the rules, the SEC noted. FTXs $9 billion transfer Investigators under the Bank Secrecy Act flagged the bank’s actions but claimed there was no risk at the time.
The bank’s executives also failed to disclose certain deficiencies due to the increased risks posed to some digital asset clients. As a result, former Silvergate CEO Alan Lane, former COO of the bank Kathleen Fraher, etc. were also sued for failing to monitor suspicious activity.
Bank Agrees to $63 Million Settlement
Silvergate and some of its former executives have reached a settlement with the SEC, the California Department of Financial Protection and Innovation, and the Federal Reserve, in which the bank will pay $63 million ($43 million in fines to the Fed and $20 million to state regulators) after allegations of violations and misrepresentations to customers.
Fraher and Lane agreed to the settlement, while former CFO Antonio Martino denied the allegations. Fraher and Lane will pay fines and penalties including a five-year ban from serving as directors of public companies.
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David is a financial news writer with 4 years of experience in the Blockchain Technology and Cryptocurrencies field. He is interested in learning about emerging technologies and has a talent for following breaking news. Following trends, David has reported on various areas such as regulation, partnerships, crypto assets, stocks, NFTs, etc. Away from the financial markets, David enjoys cycling and horseback riding.
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