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

The probe is investigating Silvergate’s internet hosting of accounts linked to former FTX CEO Sam Bankman-Fried’s companies, in keeping with “individuals accustomed to the matter” as reported by Bloomberg on Feb. 3.

The California-based crypto financial institution isn’t 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 employees 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 establish whether or not Silvergate and some other firms working with FTX had been conscious of the state of affairs.

Based on 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, in keeping with the report.

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

Crypto dealer Josh Rager commented on how this newest prison investigation could influence crypto exchanges with ties to Silvergate.

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.

Associated: 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 in keeping with MarketWatch. Moreover, SI costs had been at the moment 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.