25 April, 2024



FTX, Alameda Deals Land Silvergate in a Lawsuit

17 Dec, 2022

25 Nov, 2023

Silvergate Bank is facing the brunt of the FTX and Alameda debacles. A class-action lawsuit is ensuing for Silvergate Bank, and others. Under probe is Silvergate’s alleged conduct of transferring deposits of FTX users over to the bank accounts of Alameda Research.

But that’s not all. Also roped in the lawsuit filed at the California Southern District Court are Silvergate Capital Corporation and Alan Lane (CEO, Silvergate).

Acting as plaintiff in the class-action lawsuit on behalf of himself and others is Joewy Gonzalez.

Per the lawsuit, Joewy Gonzalez and others suffering alike invested money in crypto via FTX. He and other investors did so upon being promised that they could

Store assets securely as they gained in value, cash them out or trade them for other assets.

It’s alleged in the suit that Silvergate played a key role in enabling and veiling the scammy activities of FTX. The conduct of FTX violating its fiduciary duty via unethical fund transfers and lending of user funds remained hidden due to Silvergate.

The lawsuit goes on to hold Silvergate accountable for “furthering FTX’s investment fraud.” It also claims that Silvergate should now enable a return of the user funds to the plaintiff and other investors.

Representing the plaintiff is the law firm, Girard Sharp and Hartley LLP. On the contrary, the counsel of the defendants is still absent at press time.

The legal team of FTX seeks permission to sell-off FTX Europe, FTX Japan, LedgerX (the derivatives exchange), and Embed (the stock-clearing platform). The attorneys say a speedy selling process is a dire need, since the assets’ value is at stake with rising regulatory pressures on the enterprises.

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