Several United States senators have reportedly written a letter requesting responses from Silvergate Capital, the parent company of Silvergate Bank, regarding the collapse of cryptocurrency exchange FTX.
According to a Bloomberg report on January 31, US senators including Elizabeth Warren, Roger Marshall and John Kennedy saying Silvergate had not fully responded to questions in response to a December letter about its alleged role in handling FTX user funds. Silvergate reportedly cited restrictions on the disclosure of "sensitive supervisory information," a reason the senators said was unacceptable.
"Both Congress and the public need and deserve the information necessary to understand Silvergate's role in the fraudulent collapse of FTX, particularly given the fact that Silvergate turned to the Federal Home Loan Bank as its lender of last resort in 2022," it read. the letter, according to Bloomberg.
Warren, Marshall, and Kennedy they signed their names to a 2022 letter giving Silvergate until December 19 to provide answers to lawmakers about its involvement in the FTX debacle. However, the senators allegedly said the firm had omitted crucial information needed to determine Silvergate's role in the alleged FTX fraud, even if it mishandled the transfer of user assets from FTX to Alameda.
Following the liquidity crisis and FTX's bankruptcy filing in November 2022, and prior to the arrest of former CEO Sam Bankman-Fried, Warren and Senator Sheldon Whitehouse asked the Department of Justice to investigate the collapse of the crypto exchange and consider prosecuting certain individuals. The recent letter gave Silvergate until February 13 to send a response, including on the company's due diligence practices.
Related: Silvergate sold assets at a loss, cut staff to cover $8.1bn in withdrawals: report
Members of Congress have been organizing for their 118th session after Republican lawmakers in the House of Representatives were unable to come to an agreement to elect the next Speaker for days, delaying committee assignments and legislation. Senators and House members held hearings to explore FTX's downfall in December, with leaders suggesting at the time that the investigation would continue in 2023.
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