Silvergate Bank Facing Criminal Probe: DoJ Investigates Crypto Dealings

• The Department of Justice has launched a criminal investigation into Silvergate Capital Corp. and its dealings with bankrupt crypto firm FTX and its sister concern Alameda Research.
• Silvergate saw over two-thirds of its customer base withdraw deposits of over $8 billion after the collapse of FTX, resulting in a net loss of $1 billion for the bank in the fourth quarter of 2022.
• Federal prosecutors are conducting a criminal probe into Silvergate’s operations, including their dealings with FTX and Alameda Research, raising the possibility that charges could be brought against them.


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 of FTX and Alameda Research for fraudulent activities.

Silvergate Investigations

An inside source has reported that the DoJ is now looking into the operations of Silvergate Captial Corp., which is the parent company of fintech-focused Silvergate Bank; one of FTX’s major backers who lost over two-thirds of customer deposits totaling $8 billion after FTX collapsed in late 2022. This resulted in a net loss for Silvergate Bank during Q4 2020 amounting to $1 billion, prompting them to lay off employees as part of damage control efforts.

Criminal Probe Underway

Silvergate has been under increasing scrutiny due to their ties to Sam Bankman-Fried (FTX founder) and his associated businesses, causing their shares to drop by 88% in 2022 coupled with premarket trading losses amounting to 40%. This situation has led federal prosecutors from DOJ’s fraud section launching a criminal investigation into Silvergate’s dealing with both FTX & Alameda Research; creating further FUD among investors already wary about delving into cryptocurrency markets.

Could Charges Be Brought?

Recently, US senators have requested information from Silvergate regarding risk management practices as well as details on their interactions with both firms mentioned above. This wave anti-crypto sentiments among government departments leaves open possibility that charges could be brought against them if any wrongdoing is found during investigations or otherwise uncovered upon further examination.

Silvergates Struggles

Despite initially being small US organization prior going public 2019 – entering crypto market enabled it become bank for crypto companies that were turned down by traditional banking service providers; unfortunately this success was short lived as aforementioned events transpired resulting it facing significant backlash both financially & legally as well as suffer reputation damage due uncertainty created by judicial scrutiny currently underway .