The Federal Reserve is ending its enforcement action against defunct crypto-friendly bank Silvergate after hitting the firm with a multimillion-dollar fine.
In a new press release, the Federal Reserve says it’s dropping its enforcement action against the bank after it fulfilled its promise to liquidate its reserves and pay back all deposits to its customers.
“The Board’s enforcement action, which has been in effect since May 2023, ensured that Silvergate would liquidate and wind down operations in a manner that protected the bank’s depositors.
Since that time, Silvergate has completed its liquidation and wind-down plan, has paid back all deposits to its customers, and no longer functions as a bank.”
Earlier this year, the Fed announced that it fined Silvergate $43 million for having deficient anti-money laundering protocols. The Department of Financial Protection and Innovation of the State of California also fined the bank $20 million.
According to the announcement, the U.S. Securities and Exchange Commission (SEC) also separately filed a penalty against Silvergate.
In 2023, the California-based bank said that it would be ceasing operations and liquidating its $11 billion in assets due to the multi-billion-dollar collapse of crypto exchange platform FTX in November 2022.
At the time, the bank said it would be shutting down due to “recent industry and regulatory developments.” The firm’s SEN platform, which let institutions swap crypto and cash without the need for bank wires, was also shut down.
Last November, FTX co-founder Sam Bankman-Fried was found guilty of mishandling customer funds and defrauding investors and was sentenced to decades behind bars.
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