- US Regulators Launch Official Probe: US regulators have officially launched a probe into the dealings between Silvergate bank and FTX Group.
- Silvergate Forced to Lay-off Staff: As a result of the FTX’s collapse, Silvergate was forced to lay off 40% of its staff and take out billions of dollars in loans.
- No Accusations Yet: Despite the investigation, no accusations have been made as of yet.
US Regulators Launch Probe Into Silvergate-FTX Dealings
The US regulators have officially launched a probe into the dealings between Silvergate bank and FTX Group. This follows an exchange of letters between Silvergate and Sen. Elizabeth Warren and her associates who accused the bank of responding evasively. As a result of FTX’s collapse, Silvergate was forced to lay off 40% of its staff and take out billions of dollars in substantial loans to cover potential losses due to a possible bank run.
Silvergate’s Financial Status Investigated
The current taken out by Silverage allegedly amounts to most of its current cash reserves. The organization’s balance sheet is also looking worse for wear, having faced a loss of $1 billion over the past quarter – and a 20% drop in share price in extended trading hours on Thursday.
No Accusations Yet
Despite the investigation, no accusations have been made as yet. Instead, this investigation is being coordinated by Federal Reserve Bank Supervisor Brian Brooks as part of his mission to better understand how cryptocurrency assets are being used within traditional banking systems.
Investigation Looking into Potential Risk Factors
Brooks’ investigation will look into whether or not cryptocurrency assets present any risk factors that could potentially destabilize traditional banking systems if left unchecked. It will also seek to identify any other areas where increased oversight may be required to protect retail customers from similar situations occurring in future.