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id: 479, Created by Stan Vick, Scout
The reputable media suspect Silvergate in compliance breaches
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On November 17, 2022, The Bear Cave newsletter released an article related to FTX that highlighted a connection linking Silvergate to a money laundering operation that transferred $425 million off cryptocurrency trading platforms.
On this news, Silvergate’s stock price dropped over 10% and the Company lost more than $100 million of its capitalization, seriously damaging investors.
- The WSJ wrote in its article on November 9, 2022, that "Silvergate doesn’t hold cryptocurrencies but operates a network that helps big institutional investors trade crypto and move their money between exchanges. It does lending backed by crypto assets but says it holds large amounts of collateral it can cash out at any time."
- Later on November 20, 2022, The Wall Street Journal published an article entitled “Crypto Bank Silvergate Battles FTX Contagion Fears: The collapse of Sam Bankman-Fried’s empire has sparked investor fears about banks that courted crypto companies” which stated “crypto-trading platform FalconX told its customers it was no longer using Silvergate. FalconX said the elevated risk in the crypto market required extra caution and told customers its decision was consistent with other market players.”
Taking all facts released in reputable media into account, Investors have reasons to suspect that the Bank, its Leaders, and its Service Providers (Auditors) could breach its fiduciary duties to shareholders and stakeholders by failing to conduct proper risk management and compliance procedures.
On another hand, if all these facts will not be proven by authorities then Investors have all grounds to suspect media sources of negligence or price manipulations, which damage SI shareholders.
Failure to Disclose,
Breach of Fiduciary duty,
Shock Event Date
17 November 2022