On July 1, 2024, the Federal Reserve Board fined Silvergate Capital Corporation and Silvergate Bank $43 million for deficiencies in Silvergate's monitoring of transactions in compliance with anti-money laundering laws. In May 2023, Silvergate announced that it was voluntarily winding down its operations, and has now paid back all deposits to its customers.
Silvergate Capital Corporation is a registered bank holding company that owns and controls Silvergate Bank. From 2014 through March 2023, Silvergate focused on providing banking and financial services to foreign and domestic companies engaged in, among other things, buying and selling crypto-assets. In 2017, Silvergate launched the Silvergate Exchange Network (SEN), an internal payments platform that permitted customers participating in the SEN to make and receive internal Bank transfers of U.S. dollars to and from other bank customers participating in the SEN. However, the Board identified deficiencies in Silvergate’s monitoring of internal transactions through the SEN. This resulted in a mutual agreement between the Board and the Bank to enter a cease-and-desist order that requires Silvergate to implement the Bank’s self liquidation and cessation of operations.
Read the FRB’s press release here.
The order can be found here.