The Justice Department’s fraud department has begun probing Silvergate’s handling of accounts for Sam Bankman-Fried’s firms, Bloomberg reported, citing unnamed people familiar with the matter.
The fraud probe is focused on potential criminal wrongdoing in allowing FTX’s deposits – including user funds – into Alameda’s accounts, according to the report.
The porous relationship between the jumble of firms tied to Sam Bankman-Fried came to light amid ongoing bankruptcy proceedings. Silvergate's role as bank to the failed crypto empire has placed it under increased scrutiny.
Senators have also repeatedly questioned Silvergate's conduct, calling the bank’s role in managing funds related to FTX an “egregious failure.”
Silvergate has long operated in that market and is one of the biggest players providing such a bridge for dollar deposits.
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