Regarding its relations with bankrupt FTX and Alameda Research, a class-action lawsuit was filed at the California Southern District Court against Silvergate Bank, Silvergate Capital Corporation, and Silvergate CEO Alan Lane.
The class-action lawsuit is filed by Massachusetts citizen Joewy Gonzalez, on behalf of himself and all others similarly situated.
Girard Sharp and Hartley LLP is the plaintiff’s legal counsel. The defense attorney for the Silvergate corporation hasn’t yet stepped up.
According to the lawsuit, the plaintiff invested his savings in cryptocurrency entrusting FTX, and as a result of FTX’s recent crisis, he and other FTX investors are unable to get their money back and “face years of uncertainty and catastrophic losses.”
The lawsuit states that Silvergate, by actively taking part in the commingling of funds, improper transfers, and lending out of customer money, the bank directly assisted and encouraged FTX’s fraud and breaches of fiduciary duty.
“Silvergate is liable for its role in furthering FTX’s investment fraud and breaches of fiduciary duty and is obligated under common law to make Plaintiff and the other investors whole,” the plaintiff notes.
Following FTX’s collapse, Silvergate CEO Alan Lane published a public letter trying to calm shareholders on how they navigated the situation. Silvergate reportedly performed extensive due diligence on FTX and its affiliated companies, including Alameda Research, both during the onboarding process and through continuous monitoring.
Senators Elizabeth Warren, John Kennedy, and Roger Marshall wrote a letter to Silvergate on December 6 demanding information about the company’s role in the FTX collapse and requesting information from Lane regarding the relationship between the company and FTX. Silvergate has until December 19 to respond to the lawmakers.