Silvergate, a crypto-friendly bank based in San Diego, becomes the latest victim of the crypto downfall. The company released a public statement pleading to have been exposed to the FTX debacle.
Silvergate falls victim to FTX collapse
Silvergate bank has accepted the hard truth of being exposed in the FTX saga. As a result, its shares plummeted below its 2-year low record. The bank stock price fell almost 13% in the last 24 hours as investors and shareholders reacted to the news.
The announcement was made through a public statement in which the financial institution stated it fell “victim to FTX’s and Alameda Research’s apparent misuse of customer assets and other lapses of judgment.”
Last month, Silvergate shockingly disclosed that FTX’s deposit constituted more than 10% of the bank’s total deposits made by crypto-savvy investors. Its investors and shareholders took to the trading floor to dump their holdings, citing a deeper relationship between the bank and the crippled digital asset exchange.
The shareholders feared that more funds than the reported numbers could be in jeopardy as more truths about FTX continue to come to light.
Senators demand details from the financial institution
Senators Elizabeth Warren (D-Mass.), John Kennedy (R-La.), and Roger Marshall (R-Kan.) recently sent a petition to the institution asking for information about the bank’s alleged involvement in aiding deposit trades towards the defunct crypto exchange FTX and its affiliate company, Alameda Research. The parliamentarians have given Silvergate until Dec. 19 to provide a detailed explanation of the queries highlighted in the letter.
FTX’s case is currently proceeding in front of the jury. The latest reports indicate that the founder and former CEO of FTX, Sam Bankman Fried, has been charged for his illegal activities of embezzling funds from clients and investors. The fall of FTX has reinforced the ongoing bear market that began earlier this year, devouring crypto prices to significant lows witnessed before the start of the previous bull market.
The limelight of hope falls to crypto investors as institutions in the ecology embark on proof-of-reserves to ascertain holders of the guarantee withdrawals any time they wish to do so. As government regulators plan to overwhelm the industry with crypto regulations, investors hope for a market turnaround and a safer digital asset space.