US Court Orders FTX to Pay Rp202.3 Trillion in Compensation to Customers

The United States Securities and Exchange Commission (SEC) has filed a lawsuit against Silvergate Capital Corporation, the parent company behind a crypto-friendly bank that allegedly helped facilitate a fraud at the defunct FTX exchange.

Quoting Cointelegraph, Tuesday (2/7/2024) in a filing on July 1 in the US District Court for the Southern District of New York, the SEC accused Silvergate, its former CEO Alan Lane, and former Chief Risk Officer Kathleen Fraher of misleading investors regarding the Bank Secrecy/Anti-Money Laundering Act.

The regulator also charged former Silvergate Chief Financial Officer Antonio Martino with misleading investors about the company’s expected losses from securities sales after FTX’s collapse. All parties except Martino have agreed to settle the SEC’s lawsuit.

“The allegations made by the SEC are baseless and irresponsible, and I look forward to taking my case to court and clearing my name,” Martino said in a statement provided by his attorneys at the law firm Linklaters.

According to SEC enforcement director Gurbir Grewal, Silvergate allegedly failed to detect suspicious transfers of nearly $9 billion (Rp. 147.4 trillion) between FTX and its related entities, resulting in significant losses for investors.

He also accused the bank and its executives of misleading investors after FTX’s collapse in November 2022 to January 2023. The SEC said Silvergate had agreed to pay a $50 million civil penalty but did not admit or deny the allegations.

Meanwhile, Lane and Fraher agreed to pay fines of USD 1 million (Rp. 16.3 billion) and USD 250,000 (Rp. 4 billion) respectively.

Even though the fine has been paid, settlement of the lawsuit will depend on court approval.

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