U.S. prosecutors are investigating California-based cryptocurrency bank Silvergate Capital over its handling of accounts linked to now-bankrupt crypto exchange FTX and Alameda Research.
The Department of Justice’s fraud unit is conducting the investigation. Silvergate has not been accused of any wrongdoing and the investigation is in its early stages.
The news caused Silvergate’s shares on the NYSE to drop 18% in after-hours trading, erasing most of the 29% gain during the day.
The company posted a net loss of $949 million in 2022 compared to a net income of $75.5 million in 2021. In January, Silvergate laid off 40% of its employees, or around 200 people, following the collapse of FTX.
