Senators investigating the billions of wealth lost in the FTX collapse demanded a response From Silvergate Bank. The letter penned by Senators Elizabeth Warren, Roger Marshal, and John Kennedy questioned Silvergate’s role in the alleged facilitation of customer deposits to Alameda Research accounts.
The letter, whose content was revealed to NBC News on December 6, questions Silvergate chief executive Alan Lane to furnish the US senators with details on the business relationship with the embattled FTX entities.
Bank Facilitative Role Questioned
The letter questions the bank’s involvement in the disturbing allegations of transferring customers’ funds within the cross-owned entities. The lawmakers’ task Lane to explain the egregious failure in Silvergate’s responsibility to detect and report suspicious funds transfer activities by its clients. The letter demanded a response from Silvergate by December 19.
Meanwhile, Senator Warren indicated that Silvergate Bank is at the center of facilitating the improper transfer of billions from the FTX customers’ funds. Calling for accountability, Warren echoed previous pleadings for the Department of Justice to prosecute perpetrators of the FTX scheme.
Also read:Ultimatum Letter Penned to Silvergate
The request issued by the senators to the Silvergate Bank for further details coincided with Lane’s letter released on December 5. The letter criticizes opportunities and short speculations for leveraging market uncertainty to spread misinformation. The letter confesses that Silvergate completed the due diligence checks on FTX Group and affiliate entities.
The letter emphasizes that due diligence is a mandatory requirement during onboarding. Besides, conducting background checks on FTX and affiliates constituted a critical element of Silvergate’s risk management procedures. Lane regrets that Silvergate became a victim of Sam Bankman-Fried’s schemes in the apparent assets misuse and judgment lapse in FTX and Alameda Research.
Investigations Extend to Bankman-Fried Testifying
Elsewhere, US Congress members confirmed the scheduled hearings to investigate Banman-Fried and FTX’s downfall. Besides, it will leverage the investigative sessions to avert similar occurrences as a basis for regulatory solutions.
The House Financial Services committee confirmed inviting Bankman-Fried to appear in the investigative sessions. In particular, the committee leadership settled on December 13 for Bankman-Fried to testify.
However, the committee indicated the former FTX chief executive could testify remotely or attend the hearing. It is uncertain whether the embattled Bankman-Fried will testify, though he has attended endless appearances in multiple media.
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