Silvergate Bank 'aided and facilitated' SBF and FTX fraud, lawsuit claims

By: Mark Jessy

Silvergate Bank 'aided and facilitated' SBF and FTX fraud, lawsuit claims

February 15, 2023 8:04 AM

This is the fourth proposed class action complaint against Silvergate that has been filed in the past two months over the company's connections to Sam Bankman-Fried and the now-defunct cryptocurrency exchange FTX.

Accusations have been made that Silvergate Bank and its CEO Alan Lane "aided and abetted" a "multibillion-dollar fraudulent scam conducted by Sam Bankman-Fried (SBF)" and two of his firms, FTX and Alameda Research.

The proposed class action lawsuit was filed on February 14 in the United States District Court for the Northern District of California on behalf of a San Francisco resident who, like other FTX clients, had almost $20,000 worth of cryptocurrency frozen after the exchange went bankrupt last year.

Soham Bhatia, the plaintiff, accuses Silvergate Bank, Silvergate Capital Corporation, and CEO Alan Lane of hiding the "real nature of FTX" from their clients by failing to prevent Alameda Research from using customer cash for FTX.

The lawsuit states, "at all relevant time, Silvergate, Bankman-Fried, and Lane were each co-conspirators of the other." 


Silvergate and Lane conspired with Bankman-Fried to commit fraud against the class representative and the named plaintiff.

"Defendants acted with an understanding of their wrongdoing and realized that their action would substantially enhance the completion of their illegal design by aiding, abetting, encouraging, and substantially supporting the wrongful acts, omissions, and other misconduct described above."

The lawsuit asks for unspecified damages along with restitution and disgorgement of earnings.

The district court has not yet certified the claim as a class action, which is required for it to move forward.

This planned lawsuit is the third class action suit filed in the last two months against Silvergate.

Plaintiff Joewy Gonzalez filed a similar class action lawsuit against Silvergate on December 14 in the California Southern District Court, charging Silvergate of "furthering FTX's investment fraud" by assisting the cryptocurrency exchange by depositing customer funds into Alameda bank accounts.

The United States District Court for the Southern District of California received a class action lawsuit against Silvergate Capital Corporation on January 10, alleging that Silvergate's platform failed to detect instances of money laundering "in amounts exceeding $425 million" involving South American money launderers.

Statistica Capital, an algorithmic trading firm, filed a proposed class action lawsuit against Signature Bank on February 6th, saying that the bank "really knew of and materially helped the now-infamous FTX fraud."


Particularly, "Signature knew of and permitted the commingling of FTX customer deposits within its proprietary, blockchain-based payments infrastructure, Signet," the report stated.