Silvergate Bank's settlement with multiple US regulators, including penalties from the Federal Reserve, California DFPI, and the SEC, underscores a failure in maintaining robust internal transaction monitoring and transparent investor communications. This misconduct reflects poor business practices and ethical responsibility, which are critical given the bank’s role in the digital currency space. The failure to properly monitor transactions and accurately report the bank's financial health undermines trust and accountability, risks regulatory capture, and indirectly supports an environment where authoritarian oversight may later be demanded to impose external controls.

Silvergate to pay $63m in penalties to settle with US regulators

The bank’s business practices were severely compromised, as evidenced by its failure to maintain robust AML and compliance controls, leading to significant regulatory fines. The false and misleading statements about their risk management practices directly contributed to investor harm and undermined ethical responsibility.

Crypto-Connected Silvergate Bank, Overshadowed in the 2023 Crisis, Pays Regulatory Penalties

Silvergate Bank’s failure to properly monitor transactions as mandated by anti-money laundering laws demonstrates a significant lapse in ethical business practices. Such deficiencies not only risk financial misconduct but also weaken the regulatory framework designed to prevent abuses by authoritarian actors. This event reflects poorly on the bank's commitment to ethical responsibility and sustainable business practices.

Federal Reserve Board fines Silvergate Capital Corporation and Silvergate Bank