Silvergate Bank ‘Aided and Abetted’ FTX Fraud, Alleges Lawsuit

The latest class action filings in the string of lawsuits allege Silvergate Bank over the last two months about the links with Sam Bankman-Fried and the fallen crypto asset exchange firm FTX. 

According to the newly proposed class-action lawsuit, Silvergate bank and its CEO Alan Lane have been accused of “aiding and abetting” a “multibillion-dollar fraudulent scheme orchestrated by Sam Bankman-Fried (SBF)” and two of his entities, FTX and Alameda Research.

The lawyers representing a San Francisco-based FTX user, who lost around $20,000 in crypto when FTX collapsed, filed the lawsuit. The proposed class-action lawsuit was filed on 14th February in the US District Court. 

Plaintiff Soham Bhatia accused Silvergate Bank, its parent company (Silvergate Capital Corporation) and the CEO Alan Lane was informed about using FTX customer funds by Alameda Research and has alleged them of concealing “the true nature of FTX” from its customers.

According to the lawsuit, “At all relevant times, Silvergate, Bankman-Fried and Lane were each co-conspirators of the other.” Moreover, the allegations were that Silvergate and Lane aided, abetted and supported Bankman-fried in jointly committing a fraudulent agenda upon Plaintiff and the class. 

It revealed, “By aiding, abetting, encouraging and substantially assisting the wrongful acts, omissions and other misconduct alleged above, Defendants acted with an awareness of their wrongdoing and realised that their conduct would substantially aid the accomplishment of their illegal design.”

The suit aims to combine the damages, restitution and disgorgement of profits with the amount to be determined in the trial. However, the lawsuit is under certification from the district court, which is necessary before it can proceed as a class action. 

This lawsuit adds to the complaints against Silvergate over the last two months. In December 2022, plaintiff Joewy Gonzalez filed a similar case in the US District Court, which accused the bank of its role in “furthering FTX’s investment fraud.”

On 10th January, another class action lawsuit was filed against Silvergate’s parent firm for failing to detect the occurrences of money laundering in amounts exceeding $425 million involving South American criminals. 

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