Silvergate Bank logo in red background. Source: Rokas - stock.adobe.com

Key Takeaways:

The SEC has sued Silvergate Capital, alleging involvement in a $9 billion fraud related to the collapsed FTX exchange.
Silvergate and its former executives are accused of misleading investors about compliance and monitoring programs.
Silvergate has agreed to a $50 million civil penalty, while some former executives will contest the charges.

The SEC has sued Silvergate Capital Corporation, alleging its involvement in a $9 billion fraud related to the collapsed FTX exchange.

The SEC claims that Silvergate, along with former CEO Alan Lane and former Chief Risk Officer Kathleen Fraher, misled investors about their compliance programs and monitoring of crypto customers.

BREAKING: The SEC filed a lawsuit against Silvergate Bank
— Blockworks (@Blockworks_) July 1, 2024

Former CFO Antonio Martino is also accused of misleading investors about expected losses from securities sales after FTX’s collapse.

While Silvergate, Lane, and Fraher have agreed to settle, Martino plans to contest the charges.

Silvergate is accused of failing to detect suspicious transfers involving FTX, resulting in significant investor losses.

The settlement includes a $50 million civil penalty for Silvergate, with Lane and Fraher paying $1 million and $250,000, respectively.

The lawsuit follows a class-action suit by FTX users against Silvergate.

SEC SETTLES WITH SILVERGATE BANK OVER FALSE STATEMENTS ON AML PROCEDURES

– The U.S. SEC has filed a lawsuit against Silvergate Capital Corporation, alleging the bank made false statements about its anti-money laundering (AML) procedures and failed to detect nearly $9 billion in… https://t.co/72Keag7ubr pic.twitter.com/nuQ1xKvoMD
— BSCN (@BSCNews) July 1, 2024

Recent Supreme Court opinions may affect future SEC crypto enforcement cases.