Silvergate Capital in La Jolla, Calif., said it “conducted extensive due diligence” before agreeing to work with FTX and Alameda Research.
“We take risk management and compliance extremely seriously,” CEO Alan Lane wrote in a public letter defending how the $15.5 billion-asset company vets and banks digital asset firms.
Silvergate is required by law to identify a potential client’s beneficial owner, funding sources and the purpose and expected use of funds. The onboarding process can take weeks.
The company also monitors transaction activity to identify “activity outside of the expected usage,” Lane wrote. “We have a track record of closing accounts that are used for purposes outside of the expected use,” he added.
Lane said Silvergate followed the rules while handling funds transfers involving Alameda.
Finally, he reiterated that Silvegate has a “resilient balance sheet and ample liquidity,” notinh that the company purposefully carries cash and securities that exceed its digital asset-related deposit liabilities.
Three U.S. senators recently asked Silvergate to release all records about transfers of funds for FTX.