Crypto financial institution Silvergate is reportedly being probed by the US Division of Justice fraud unit over its involvement with the bankrupt FTX change and its associates.

The probe is investigating Silvergate’s internet hosting of accounts linked to former FTX CEO Sam Bankman-Fried’s companies, based on a Feb. 3 report by Bloomberg, which cited “individuals conversant in the matter.”

The California-based crypto financial institution is just not accused of any crime, however investigators are trying to find how deep the dealings with FTX and Alameda went.

Silvergate was closely impacted by the collapse of FTX in November, reporting a $1 billion loss final quarter. The financial institution axed 40% of its workers and disclosed taking out billions of {dollars} in loans to stop a liquidity disaster and financial institution run following the autumn of the SBF empire.

The federal investigators try to determine whether or not Silvergate and some other firms working with FTX have been conscious of the state of affairs.

In keeping with Silvergate, Alameda opened an account with the financial institution in 2018, earlier than the launch of FTX. It claims to have carried out due diligence and ongoing monitoring on the time, based on the report.

This week a financial institution consultant stated that the agency “has a complete compliance and threat administration program.”

Crypto dealer Josh Rager commented on how this newest felony investigation might impression crypto exchanges with ties to Silvergate.

The Silvergate DOJ fraud probe will in all probability create some fud for crypto exchanges

Humorous how they at all times time these bulletins 🙂 pic.twitter.com/7WxJYFawuF

— Rager (@Rager) February 2, 2023

On Jan. 27, Silvergate suspended its dividends, citing “current volatility within the digital asset trade.” It maintained that it had a “money place in extra of its digital asset customer-related deposits,” on the time.

US lawmakers renew request for solutions from Silvergate on FTX: Report

Silvergate inventory has misplaced 13% on the day tumbling to $17.14 in after-hours buying and selling, based on MarketWatch. Moreover, SI costs have been at present 92% down from their all-time excessive of $220 in November 2021.

Cointelegraph reached out to Silvergate for remark however had not acquired a response on the time of publication.