Silvergate Capital Corporation has released an open letter noting that the bank has carried out due diligence on Alameda Research and FTX. The bank added that it has strong liquidity and balance sheet. The letter was written by Alan Lane (the chief executive officer of Silvergate Capital Corporation) on the 5^th of December 2022. This has been done to clear the position of the company after the FTX mess.

Silvergate’s Open Letter Says the Platform Has Performed Due Diligence in FTX’s Case

In the letter, the CEO mentioned that the previous weeks have been very hard for the market of digital assets. He added that this has occurred due to disastrous things like the seeming misuse of customer assets as well as the rest of the lapses in the management of Alameda Research and FTX.

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Silvergate CEO uncovered that during some of the previous weeks the bank has prioritized facilitating the customers because they lead this volatile scenario. He further said that his customers keep on accessing the US-dollar deposits thereof in the time of requirement. As mentioned in the letter, the entity has been offering uninterrupted services during the same period. While discussing the risk-management controls, the Silvergate CEO revealed that the bank complies with the USA PATRIOT Act and the Bank Secrecy Act.

He asserted that under these laws there is a requirement for every account to specify a beneficial owner, the purpose, the funds’ source, as well as the likely utilization of the funds. The CEO brought to the front that the bank has invested substantial funds in procedures and systems to assist in guaranteeing the organization of adequate observation and consumer due diligence. According to him, Silvergate carried out considerable due diligence in the case of FTX as well as the associated entities taking into account Alameda Research.

The Entity Comprises Sufficient Liquidity and a Robust Balance Sheet, Says the CEO

In his words, the platform did this during its onboarding procedure as well as the ongoing monitoring, in line with the risk management procedures and policies. This takes into account operating an over-the-counter (OTC) trading company and separate OTC-trade-supporting entities in the case of Alameda. At the end of the document, Lane claimed that Silvergate Bank has sufficient liquidity and a strong balance sheet, indicating the safety of the consumer funds.

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