Silvergate Stock Tanks on Report of DOJ Probe Tied to FTX, Alameda Dealings

Shares of the crypto bank were falling almost 30% following the publication of a Bloomberg article Thursday.

AccessTimeIconFeb 2, 2023 at 10:07 p.m. UTC
Updated Feb 3, 2023 at 4:46 p.m. UTC

Shares of Silvergate Capital (SI) fell sharply after the market close on Thursday following the publication of a Bloomberg article reporting the U.S. Department of Justice’s fraud unit was looking into the crypto bank’s dealings with the now-bankrupt FTX and Alameda Research.

The criminal investigation is looking at Silvergate’s hosting of accounts tied to FTX and Alameda, according to people familiar with the matter speaking to Bloomberg.

Silvergate hasn’t been accused of any wrongdoing and the investigation could end without any charges being brought, according to Bloomberg.

Silvergate shares were down 28% in after-hours trading to $15.06, wiping out almost all of its 29% rally during the day’s session following a Federal Reserve-related rally in cryptocurrencies and crypto stocks.

On Friday morning, Silvergate shares were only down a little over 2%, though. On CNBC on Friday, MicroStrategy executive chairman Michael Saylor said his company would continue to do business with Silvergate, noting that "they were able to meet redemptions" and "the loan terms we have with them are nearly four times over-collateralized by 25% loan-to-value while the irresponsible crypto banks were doing under-collateralized loans.”

UPDATE (Feb. 3, 16:46 UTC): Adds share price information and Michael Saylor quote in last paragraph.


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Nelson Wang is CoinDesk's news editor for the East Coast. He holds BTC and ETH above CoinDesk's disclosure threshold of $1,000.

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