There Is An Important Role Of Silvergate In SBF’s Financial Crimes, Says A Class-Action Lawsuit

A class-action legal case proposes that a significant role has been played by Silvergate in the alleged scam that took place at FTX (the crypto exchange of Sam Bankman-Fried). The petitioners assert that the crypto bank has also been responsible for the potential fraud of the crypto exchange as the accounts were maintained by it for the bankrupt exchange and its sister trading company Alameda Research, assisting in the violation of fiduciary obligation.

FTX Investors File Class Action Legal Case against Silvergate and its CEO

The legal case, submitted in the US District Court for the Southern District of California, mentions that the bank had witnessed collaboration in the strategy of the crypto exchange to carry out a scam as a lot of accounts related to Alameda Research, FTX US, and FTX Ltd. – with which illegal activities were committed – had been held by it.

Bankman-Fried, the former CEO and founder of the crypto exchange, got arrested on the 12th of December under criminal charges dealing with conspiracy to wire fraud, wire fraud, conspiracy to securities fraud, securities fraud, as well as money laundering.

The plaintiffs of the case, including Joewy Gonzalez and the rest of the people who lost their funds in its debacle, have accused the bank of transacting the client deposits from FTX into Alameda Research-based bank accounts. The debacle of FTX has badly influenced the whole crypto market as a lot of other companies are getting affected over time.

Alan Lane, the chief executive officer of Silvergate, is experiencing the respective class-action legal battle at the California Southern District Court. As per the lawsuit, the transfer of funds from FTX to Alameda was a crucial cause at the back of the crypto entity’s crash. Consequently, both FTX and Alameda were compelled to announce bankruptcy. It is claimed by Gonzalez that – as he was an investor – FTX guaranteed them to securely store crypto assets.

The plaintiff additionally specified that the crypto exchange assured the investors to cash out or trade their assets for the rest of the assets. The legal case alleges Silvergate of furthering the investment scam of FTX. According to the case, the crypto bank should give back what the entity owes to the petitioner as well as the rest of the FTX investors.

US Senators Ask Questions from Silvergate Crypto Bank

Formerly this month, a senators group expressed their intention to gather additional information regarding Silvergate’s management of Alameda and FTX-related funds and individual wellbeing. To get the answers to their questions, they wrote down a letter to the bank. In that letter, they asked about the position of Silvergate Bank in the abrupt loss of several billion dollars during the FTX crash.

The senators who penned the document take into account Roger Marshall, Elizabeth Warren, and John Kennedy. They requested the CEO of the bank to disclose the particulars of the business contracts of the platform with the crypto exchange during their relationship.

It was noted in that letter that the organization’s engagement in the transaction of the FTX-based client funds to the fellow firm Alameda shows what seems to be a huge inefficiency of the bank. According to them, the bank remained unsuccessful in meeting its responsibility to oversee and report doubtful financial operations done by its consumers. Senator Warren proposed that Silvergate was seemingly the core player in the improper transactions.

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