Judge greenlights class suit alleging Silvergate Bank aided FTX fraud
A federal judge struck down Silvergate’s dismissal bid of a lawsuit claiming it aided fraud at FTX saying the allegations were adequate to proceed.
Silvergate Bank must face a class-action lawsuit from FTX users who claim the now-defunct bank aided fraud at the exchange and its connected trading firm Alameda Research.
In a March 20 order, San Diego federal court Judge Ruth Bermudez Montenegro denied Silvergate’s June dismissal motion, finding the class group adequately alleged Silvergate knew of FTX’s fraud but benefited from it and unjustly enriched itself at the expense of FTX users — allegations the bank denies.
The court found Silvergate owed a duty of care to FTX customers as its Silvergate Exchange Network — created to help move funds to crypto exchanges — was largely for the benefit of FTX customers and “that a crypto exchange like FTX was virtually impossible before the SEN.”
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