SAN FRANCISCO: Silvergate, the California lender affected by the collapse of crypto exchange FTX, has agreed to pay US$63mil to settle state and federal probes on Monday.

The Federal Reserve (Fed) announced the penalties against the bank, owned by Silvergate Capital Corp. The Fed portion of the fine is US$43mil and the California Department of Financial Protection (DFPI) and Innovation makes up the remainder. The Securities and Exchange Commission (SEC) also said it settled with the lender.

Silvergate didn’t admit to or deny claims made by the regulators.

“The settlements announced today, which will facilitate the surrender of Silvergate’s bank charter, are part of the bank’s continued orderly wind-down and successfully conclude investigations by the Fed, DFPI and SEC,” the company said in a statement.

The bank added that it “made a responsible decision to liquidate voluntarily and without government assistance” in 2023, and that all deposits had been repaid to banking customers.

On Monday, the SEC said the lender would pay US$50mil to settle claims of negligence-based fraud for misleading investors about its compliance.

That amount could be offset by other penalties, according to the SEC.

“Because of those deficiencies, Silvergate allegedly failed to detect nearly US$9bil in suspicious transfers among FTX and its related entities,” Gurbir Grewal, the head of the SEC’s enforcement unit said.

The markets regulator also settled with former Silvergate chief executive officer Alan J. Lane and former chief operating officer Kathleen Fraher for US$1mil and US$250,000, respectively.

 - Bloomberg