SEC sues crypto-friendly bank, saying it failed to spot $9B in suspicious FTX transfers

The SEC’s going into the holiday week with its regulatory guns blazing. 

The agency sued Silvergate Bank parent Silvergate Capital Corporation on Monday, accusing the crypto-friendly bank of failing to spot nearly $9 billion in suspicious FTX transactions. FTX, the crypto exchange that filed for bankruptcy in 2022, was one of Silvergate’s largest customers. 

At the heart of the SEC’s lawsuit is the bank’s anti-money laundering policies. The SEC said that Silvergate falsely assured investors it had a robust AML program. Silvergate, which officially shuttered last year, saw significant losses after the collapse of FTX. 

The SEC said Silvergate agreed to pay a $50 million civil penalty. 

In addition to the SEC suit, on Monday Silvergate Capital Corporation was hit with $63 million in fines by the Federal Reserve Board and the California Department of Financial Protection and Innovation. The Fed said Silvergate failed in its compliance with AML laws.