U.S. senators question Silvergate on dealings with FTX

The logo of FTX is seen at the FTX Arena in Miami
The logo of FTX is seen at the entrance of the FTX Arena in Miami, Florida, U.S., November 12, 2022. REUTERS/Marco Bello/File Photo

Jan 31 (Reuters) - Three U.S. senators have asked cryptocurrency-focused bank Silvergate Capital Corp (SI.N) for details of its risk management practices and its dealings with bankrupt exchange FTX, according to a letter released on Tuesday.

Democrat Elizabeth Warren and Republicans Roger Marshall and John Kennedy said they were "disappointed" by the bank's "evasive and incomplete response" to a previous request for information the lawmakers sent to the company in December.

Silvergate did not respond to a Reuters request for comment.

The senators have now asked Silvergate for a collection of information to be submitted by Feb. 13, including if the bank had identified any wrongdoing by FTX and affiliate Alameda.

The bank's response to the previous letter had some new information which showed that its risk management and due diligence processes "failed miserably", the lawmakers added.

La Jolla, California-based Silvergate is already under pressure after FTX's bankruptcy shook the crypto market. Earlier this month, the company slashed its headcount by 40% and reported a net loss of $1 billion for the fourth quarter.

Contents of the letter were first reported by Bloomberg Law.

Reporting by Niket Nishant in Bengaluru; Editing by Maju Samuel and Devika Syamnath

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