Background
Silvergate Capital Corporation, a California-based digital currency bank, has agreed to pay $63 million in civil money penalties to resolve regulatory disputes with multiple state regulators and the Office of the Comptroller of the Currency (OCC).
Alleged Violations
The OCC and state regulators alleged that Silvergate failed to implement adequate compliance programs to prevent money laundering and terrorist financing risks, and engaged in unsafe and unsound banking practices related to the Bank Secrecy Act (BSA) and anti-money laundering (AML) regulations.
Settlement Details
According to the settlement agreement, Silvergate will pay:
- $30 million to the OCC
- $23 million to the New York Department of Financial Services (NYDFS)
- $10 million to the California Department of Financial Protection and Innovation (DFPI)
Remedial Measures
In addition to the fines, Silvergate has agreed to implement a series of remedial measures to address the alleged violations, including:
- Enhancing its BSA/AML compliance program
- Strengthening its risk management processes
- Improving its internal controls
Next Steps
The settlement agreement requires Silvergate to submit a compliance plan to the OCC and state regulators outlining the specific steps it will take to implement the remedial measures. The bank will be subject to ongoing monitoring by the regulators to ensure compliance.
Conclusion
The settlement resolves the regulatory disputes between Silvergate and the OCC and state regulators. Silvergate has acknowledged the need to improve its compliance and risk management practices and is committed to implementing the required remedial measures.
Kind regards N. Bauer.
