Silvergate Bank and its CEO Alan Lane have been accused of “aiding and abetting” a “multi-billion dollar scam orchestrated by Sam Bankman-Freed (SBF)” and his two entities, FTX and Alameda Research, in a recently proposed class action lawsuit. claim.
The proposed class action lawsuit was filed in the United States District Court for the Northern District of California on Feb. 14, lawyers representing a San Francisco-based FTX user who, like all other FTX clients, had about $20,000 in crypto frozen when the exchange crashed last year.
Plaintiff Soham Bhatia alleges that Silvergate Bank, its parent Silvergate Capital Corporation and CEO Alan Lane were aware of Alameda Research’s use of FTX client funds and accused them of hiding the “true nature of FTX” from their clients.
“At all relevant times, Silvergate, Bankman-Freed and Lane have been each other’s accomplices,” the lawsuit says, adding:
Silvergate $SI currently the shortest stock (73% outstanding)
Yes, the bank that, according to the class action lawsuit, directly “assisted and abetted the FTX fraud.” pic.twitter.com/k2zSb41pgD
— Yoda Research (@YodaResearch) February 14, 2023
Silvergate and Lane assisted and abetted, encouraged and substantially assisted Bankman-Freed in co-perpetrating a fraudulent scheme against Plaintiff and the class.
“In assisting, abetting, encouraging and substantially facilitating the wrongful acts, omissions and other wrongful acts set forth above, Defendants acted in the knowledge of their wrongdoing and in the knowledge that their conduct would materially further their wrongful intent.”
The lawsuit seeks a combination of damages, restitution and loss of profits, with an amount to be determined in court.
However, the claim still needs to be approved by the district court, which is a necessary step before it can be considered as a class action.
Cryptocurrency bank Silvergate ranks second on Wall Street in terms of the number of short positions.
The latest proposed legal action is another class action lawsuit filed against Silvergate in the past two months.
On Dec. 14, plaintiff Joey Gonzalez filed a similar class action lawsuit in the Southern District of California accusing Silvergate of its alleged role in “facilitating the FTX investment fraud” by aiding and abetting the cryptocurrency exchange when it deposited FTX user deposits into Alameda’s bank accounts.
On January 10, a class-action lawsuit was filed against Silvergate Capital Corporation in the United States District Court of Southern California, alleging that the Silvergate platform failed to detect money laundering cases “in excess of $425 million” involving South American money launderers.
On February 6, algorithmic trading company Statistica Capital filed an alleged class action lawsuit against Signature Bank, alleging that it “actually knew about and substantially contributed to the infamous FTX scam.”
We need to read a little, but this is a very clear description of the role of Signature Bank, the interweaving of FTX-Alameda funds and all that.
It takes industry insiders to reveal internal dynamics, and here’s what’s going on here. https://t.co/0DCcYPUDlT
— Simon Lelyveldt — [email protected]…n.social (@finhstamsterdam) February 13, 2023
“In particular, Signature knew and permitted the mixing of FTX customer funds on its own blockchain-based Signet payment network,” the post reads.
Cryptooshala has reached out to Silvergate for comment, but has not received a response as of press time.
Credit : cointelegraph.com
