U.S. Senators are calling on Silvergate Capital Corp to provide answers and explanations over the allegations of misuse of customer funds by cryptocurrency exchange FTX, highlighting a grave concern for consumer protection.
Their demand has raised eyebrows across the financial industry with many questioning why Silvergate, which prides itself on providing secure banking services, failed to detect signs of fraudulent activity earlier. Experts have pointed out that Silvergate’s negligence could prove disastrous in terms of investor confidence and trust. It remains to be seen if they can muster a convincing counter-argument or evidence soon enough to lessen the mounting worries of their investors.
What questions have been sent to the alleged Capital Corp?
Sensationalized queries have been posed to Silvergate Bank’s CEO, Alan Lane, by Senator Elizabeth Warren and Roger Marshall, and John Kennedy. Questions linger around whether Silvergate was aware of this activity if any transactions seemed suspicious and what due-diligence practices it conducted in regard to reviews from independent auditors and the Federal Reserve.
Moreover, skeptics are eager to understand how the bank will utilize the proceeds from its recent loan from the Federal Home Loan Bank. Unsurprisingly, the letter has created an uproar in both chambers of Congress, with senators loudly roaring for accountability and answers. Notably, this isn’t the first time FTX s alleged violation of trust has made headlines; a recent series of similar scandals have left many investors feeling tired. The bank has been given February 13 to answer all the questions.