Silvergate in DOJ Crosshairs: Crypto Fraud Probe Launched

• The United States Department of Justice is conducting a criminal probe into the operations of Silvergate Captial Corp., the parent company of the fintech and crypto-focused Silvergate Bank.
• Silvergate was one of the main backers of FTX and witnessed over two-thirds of its customer base withdrawing deposits after the crypto exchange collapsed, resulting in a net loss of $1 billion for the bank in 2022.
• The increasing judicial scrutiny has led to a 88% drop in its share price and sparked bipartisan calls for more information on its risk management practices and dealings with FTX and Alameda Research.


The United States Department of Justice has launched a probe into Silvergate Capital Corp. and its dealings with bankrupt crypto firm FTX and its sister concern Alameda Research. The FTX debacle of 2022 has continued to have consequences across the industry, including on certain firms in the TradFi sector, leading to charges being brought against the CEOs.

Silvergate Investigations

An inside source has reported that prosecutors are now looking into the operations of Silvergate Captial Corp., which was one of FTX’s chief backers. Over two-thirds of Silvergate’s customers withdrew their deposits amounting to over $8 billion when FTX collapsed, leading to a net loss for the bank in Q4 2022.

Criminal Probe Underway

As many businesses associated with FTX founder Sam Bankman-Fried had accounts hosted by Silverate, its shares lost 88% value in 2022 as investors feared legal ramifications from mounting scrutiny from government bodies such as DoJ’s fraud section conducting an investigation into their operations. This led to drastic layoffs at Silverate in order to mitigate losses incurred by them.

Could Silvergate Be Charged?

A bipartisan group fo US Senators recently asked Silvergate for details regarding their risk management practices and further information on their dealings with FTX and Alameda Research which could lead to potential charges being brought against them if found guilty by investigators.

Silvergate’s Struggles

Silverate used to be a small organization till it went public in November 2019; when it entered the crypto market it quickly became popular as a bank for crypto companies that were turned down by traditional banking service providers but now faces uncertain future due to all these events unfolding around them this year so far.