• Silvergate Capital, the parent organization of Silvergate Bank and Operator of the Silvergate Exchange Network, is facing a class action suit for law and security violations in the US.
• Antonio Martinez and Alan Lane were named as the case’s defendants and co-conspirators in breaking the US Security and Law Act of 1934.
• The organization is accused of providing false information concerning their activities and procedures, resulting in the transaction of $425 million towards South American money launderers.
Silvergate Capital, the parent organization of Silvergate Bank and Operator of the Silvergate Exchange Network, is the latest company to face legal issues over law and security violations. On the 12th of January, reports emerged that the organization had been accused of securities and law violation after allegedly being engaged in money laundering. The class action suit was filed in the US District Court of Southern California and marked all the organization’s purchases from the 9th of November 2021 to the 5th of January 2022.
Leading the case against Silvergate Capital are Antonio Martinez and Alan Lane, who have been named as the defendants and co-conspirators in breaking the US Security and Law Act of 1934. The complainants have argued that the two officials and the entire organization failed to detect money laundering instances that accumulated up to $425 million, for which the firm is answerable. Furthermore, the filed legal documents stated that the defendants provided positive data concerning the organization’s activities and procedures, which, on the other hand, had zero rational biases, and appeared to be misleading. As a result, Silvergate traded at inflationary stages as a repercussion of the misinformation and falsehood in the class period.
The accusations against Silvergate Capital revolve around the allegation that the organization actively transacted $425 million in favor of South American money launderers. It is believed that the officials at the company were fully aware of the lies that they were providing to the public, yet they continued to do so in order to maintain the inflated trading rate.
Silvergate Capital is now facing a difficult situation as the US Security and Law Act of 1934 forbids such practices and could result in severe consequences if the company is found guilty of the accusations. The company is yet to issue a statement on the matter, and it remains to be seen how the case will play out in the future.