SICPQ.US
id: 479
Silvergate ($SI) Investor Settlement
The court has approved the settlement.
$37,500,000
Cash SettlementS.D. California
Court 3:22-cv-01936
Case number11/07/2019
Class period Start11/11/2022
Class period EndSilvergate has reached a settlement with $SI investors over claims that it misled them about its anti-money laundering controls and its role in facilitating risky transfers for FTX and Alameda Research.
Outline
In 2022 Silvergate was accused of allowing billions in customer funds to flow from FTX to Alameda, raising serious compliance concerns. As revelations mounted, $SI plunged more than 90%, and Silvergate faced a lawsuit from investors.
Timeline
- November 17–18, 2022 – Reports linked Silvergate to questionable FTX-Alameda transfers. FalconX cut ties due to SEN risk. $SI dropped over 20%.
- December 2022 – A report from The Bear Cave and a downgrade by Morgan Stanley highlighted compliance and financial issues. $SI fell another 16%.
- February 2, 2023 – News broke about a DOJ investigation into Silvergate’s ties to FTX. $SI dropped 28% more.
- February 16, 2023 – Reuters reported that Binance moved $400 million through Silvergate’s SEN network without proper oversight. $SI plunged 22.27%.
- March 1, 2023 – Silvergate discontinued its SEN network and delayed filings. Shares collapsed 57.72%.
- May 11, 2023 – Investors filed a lawsuit, alleging Silvergate misled them about compliance and customer monitoring failures.
- March 26, 2025 – Silvergate agreed to a settlement with investors to resolve claims.
Background
Silvergate was a bank that served major crypto firms and operated a private payments network called SEN, allowing fast transfers between clients.
On November 17, 2022, reports revealed that FTX had directed customers to send funds to Alameda accounts held at Silvergate, raising concerns that the bank failed to properly monitor suspicious activity. This caused the stock to drop 10.98%.
A day later, FalconX, a major institutional crypto platform, severed ties with Silvergate, and $SI dropped another 10.75%. Additionally, in the following days, critical analyst reports and a Senate letter pointed to massive compliance lapses.
In early 2023, the DOJ launched a fraud probe into Silvergate’s links with FTX, and $SI crashed 28%.
Additional revelations followed, including $400M in transfers between Binance and a trading firm linked to its CEO facilitated by Silvergate. This news caused another 22.27% drop.
On March 1, 2023, Silvergate announced it would shut down its SEN Network and delay its 10-K filing, citing uncertainty about its ability to remain in operation. $SI plunged 57.72%.
A week later, Silvergate announced it would shut down and liquidate, causing shares to drop another 42%, down 99% from its peak.
On May 11, 2023, investors filed a lawsuit.
What Can Investors Expect Now?
Silvergate has reached a settlement with $SI investors over claims that it misled them about its anti-money laundering controls and its role in facilitating risky transfers for FTX and Alameda Research.
If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section below.
Case Type
US Securities Class Action
Case Status
Preliminary Approved Settlement
Alleged Offence
Mismanagement,
Failure to Disclose,
Malpractice,
Negligence,
Breach of Fiduciary duty,
Omissions
Suspected Party
Directors,
Management,
Shareholder,
Investment Bank,
Service Provider
Security Type
Stocks
Trade Direction
Long
Payout per Share
0.13
Filing date
12/07/2022
Plaintiffs
Waseem Marwan
Attorneys
Bernstein Litowitz Berger & Grossmann LLP
Defendants
Alan J. Lane; Antonio Martino; Kathleen Fraher; Benjamin Reynolds
Administrator
JND Legal Administration
Attorney fee
$7,775,000
Trades matching type
FIFO
Frequently Asked Questions
Who is eligible for this settlement?
Do I have to sell securities to be eligible?
How long does the payout process take?
How much will my payment be?
What is 11th Estate?