Amid Justice Department Fraud Probe, Silvergate Shares DropTable of Contents
Amid Justice Department Fraud Probe, Silvergate Shares Drop
By CoinUnited.io Research Team
1 min read
According to a story from Bloomberg News late Thursday, sources who wished to remain anonymous discussing the private inquiry said that the Justice Department's fraud branch is looking into Silvergate's hosting of accounts related to Sam Bankman-enterprises. Fried's No misconduct has been alleged against the crypto-friendly bank as of yet, and the investigation may come to a close without any charges being filed.
Shares of Silvergate fell as much as 17% on Friday morning and were trading down 5% at $19.93 as of 10:06 AM ET. In a year's time, the stock price has dropped by 80%.
Silvergate and the Justice Department representatives in Washington, where the inquiry is taking place, have both declined to comment.
Since the stunning collapse of FTX prompted fraud charges against Bankman-Fried and some of his senior subordinates, legislators have been paying close attention to the La Jolla, California-based bank. The bank has until February 13 to respond to a fresh set of questions submitted by legislators, including Senator Elizabeth Warren, who complained last week that the bank had been "evasive and incomplete" in its responses to their inquiries from late last year.
More than simply the bank's reputation has been harmed by the fall of FTX. According to the company's quarterly report, Silvergate lost $1 billion and had to lay off 40% of its workforce. Furthermore, it was revealed that billions of dollars in loans were taken out following the collapse of the Bankman-Fried exchange to prevent a run on deposits.
Shares rose as much as 52% despite the obstacles. After the Federal Reserve announced it will pause the pace of interest-rate hikes, crypto equities rose 29% as a result of the bullish sentiment. According to statistics from S3 Partners, the business continues to be the most shorted stock in the United States, with over 67% of its shares being sold short.
Shares of Silvergate fell as much as 17% on Friday morning and were trading 5% down at $19.93 at 10:06 AM ET. In a year's time, the stock price has dropped by 80%.
Silvergate and the Justice Department representatives in Washington, where the inquiry is taking place, have both declined to comment.
Since the stunning collapse of FTX prompted fraud charges against Bankman-Fried and some of his senior subordinates, legislators have been paying close attention to the La Jolla, California-based bank. The bank has until February 13 to respond to a fresh set of questions submitted by legislators, including Senator Elizabeth Warren, who complained last week that the bank had been "evasive and incomplete" in its responses to their inquiries from late last year.
More than simply the bank's reputation has been harmed by the fall of FTX. According to the company's quarterly report, Silvergate lost $1 billion and had to lay off 40% of its workforce. Furthermore, it was revealed that billions of dollars in loans were taken out following the collapse of the Bankman-Fried exchange to prevent a run on deposits.
Despite the challenges, crypto equities rode a wave of favorable sentiment after the Federal Reserve announced it will decrease the pace of interest-rate rises, rising as high as 52% on Thursday and closing the day up 29%. According to statistics from S3 Partners, the business continues to be the most shorted stock in the United States, with over 67% of its shares being sold short.
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