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- Silvergate Bank Lands in the Middle of Another Massive Alleged Crypto Fraud – This Time at Binance
Silvergate Bank Lands in the Middle of Another Massive Alleged Crypto Fraud – This Time at Binance
by Pam Martens and Russ Martens Wall Street on Parade
It’s only June 7, but the liquidating, federally-insured, crypto-loving Silvergate Bank is having one helluva month. On June 1, the Federal Reserve released an enforcement action (called a Cease and Desist Consent Order) that it and a California banking regulator had filed against Silvergate Bank and its parent, Silvergate Capital Corporation. (See our report: Disgraced Silvergate Bank Hints It May Not Be Able to Cover All of Its Deposits; Fed Slaps It with a Cease and Desist Consent Order.)
The bank had announced on March 8 that it was going to voluntarily wind down and liquidate itself. The announcement followed a run on the bank when news articles began appearing linking Silvergate Bank to indicted crypto kingpin, Sam Bankman-Fried. The bank is facing a growing roster of lawsuits on charges that it moved customer funds deposited at Bankman-Fried’s crypto exchange, FTX, to his hedge fund, Alameda Research, where they then went missing to the tune of billions of dollars to fund Bankman-Fried’s and other FTX executives’ lavish lifestyles.