The cryptocurrency industry continues to grapple with the fallout from the FTX collapse, as new allegations surface regarding the role of traditional financial institutions in the scandal. In a startling development, Ryan Salame, a former executive at the defunct cryptocurrency exchange FTX, has come forward with explosive claims against Silvergate Capital, once a leading crypto-friendly bank.
Salame’s assertions, shared on social media, suggest that Silvergate may have been more deeply involved in FTX’s questionable transactions than previously thought, potentially reshaping our understanding of the intricate relationships between crypto firms and their banking partners.
Silvergate Bank’s Alleged Involvement in FTX Scandal
Ryan Salame, a former executive at the now-defunct cryptocurrency exchange FTX, has leveled serious accusations against Silvergate Capital, a once-prominent crypto-friendly bank. Salame claims that Silvergate was fully aware of suspicious transactions related to FTX and its sister company, Alameda Research.
In a series of posts on social media platform X, Salame questioned the plausibility of Silvergate being unaware of the nature of transactions flowing through FTX and Alameda accounts. He pointed out the high volume of daily wire transfers between the entities and the public display of wire instructions on the FTX exchange.
“It takes about 3 minutes of critical thinking to realize it would be fundamentally impossible for Silvergate Bank to have been lied to,” Salame stated. He further questioned how a bank specializing in the crypto industry could remain ignorant of the activities of one of its largest customers.
This controversy follows Silvergate’s closure in 2023, which was largely attributed to the collapse of FTX. The bank faced regulatory scrutiny for allegedly failing to monitor over $1 trillion in crypto transactions, as per a complaint filed by the SEC. Silvergate had previously agreed to a $63 million settlement with U.S. and California regulators over accusations of internal management failings and misleading investors.
Salame’s allegations add a new dimension to the ongoing investigations into the FTX collapse, suggesting a deeper involvement of banking institutions in the crypto industry’s operations and potential oversight failures.
Also Read: South Korean Government Mulls 3-Year Delay on Crypto Taxes
Recent Developments in FTX Restructuring
The FTX restructuring plan has hit a significant snag, particularly affecting holders of the exchange’s native FTT token. The official committee of FTX unsecured creditors has made an announcement that has caused concern within the crypto community, focusing on a crucial aspect of the voting process for the exchange’s restructuring plan.
In a separate development, FTX has reached a settlement with the Commodity Futures Trading Commission (CFTC), pending court approval. This agreement marks a significant moment in the ongoing FTX bankruptcy proceedings that have dominated crypto industry news since late 2022. The settlement involves a complex arrangement concerning a $4 billion CFTC claim and introduces a new mechanism for potential additional compensation to affected cryptocurrency holders.
Also Read: Charles Hoskinson Issues Important Safety Warning On Elon Musk
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