Summary:
The SEC has sued Silvergate Bank for failing to maintain adequate anti-money laundering (AML) programs.
The lawsuit alleges that Silvergate was aware of significant deficiencies in its AML program but misled investors about its effectiveness.
The complaint specifically mentions Silvergate's failure to detect nearly $9 billion in suspicious transfers by FTX.
Silvergate, former CEO Alan Lane, and former COO Kathleen Fraher have agreed to settle with the SEC.
Former CFO Antonio Martino denies the allegations.
The settlements involve substantial financial penalties for Silvergate and the former executives.
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Silvergate Capital Corporation, the parent company of crypto-friendly Silvergate Bank, accusing them of failing to maintain proper anti-money laundering (AML) programs while falsely claiming to have adequate protections. The SEC also targeted former executives Alan Lane, Kathleen Fraher, and Antonio Martino. The complaint alleges that Silvergate was aware of significant deficiencies in its AML program, including its inability to detect nearly $9 billion in suspicious transfers by FTX. Despite these deficiencies, Silvergate continued to claim that it had no risk factors in its quarterly and annual reports. The SEC claims that Silvergate's executives were aware of the issues and failed to disclose them to investors. Silvergate, Lane, and Fraher have agreed to settle with the SEC, while Martino denies the allegations. The bank is also settling with the Federal Reserve and the California Department of Financial Protection and Innovation (DFPI). These settlements include significant financial penalties. The SEC's complaint is a major blow to the crypto industry, highlighting the ongoing regulatory scrutiny of digital asset companies and the need for robust AML practices.
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