Feb 16, 2023

Silvergate Bank Accused of “Aiding and Abetting” Fraudulent Scheme

The crypto space has been abuzz with the news of a proposed class-action lawsuit against Silvergate Bank, its parent company Silvergate Capital Corporation, and its CEO Alan Lane. The lawsuit, filed in the United States District Court for the Northern District of California on Feb. 14, accuses the three of “aiding and abetting” in a “multibillion-dollar fraudulent scheme orchestrated by Sam Bankman-Fried (SBF)” and two of his entities, FTX and Alameda Research.

The lawsuit was filed by lawyers representing a San Francisco-based FTX user who was frozen out of around $20,000 in crypto when the exchange collapsed last year. Plaintiff Soham Bhatia alleges that Silvergate Bank, its parent company Silvergate Capital Corporation, and CEO Alan Lane were aware of the use of FTX customer funds by Alameda Research and accuses them of concealing “the true nature of FTX” from its customers.

The lawsuit claims that Silvergate and Lane aided, abetted, encouraged and substantially assisted Bankman-Fried in jointly perpetrating a fraudulent scheme upon Plaintiff and the class. It seeks a combination of damages, restitution and disgorgement of profits with the amount to be determined in trial. However, the lawsuit is yet to be certified by the district court, which is a necessary step before it can proceed as a class action.

The proposed class-action lawsuit against Silvergate Bank is just one of several similar class-action suits that have been filed in the last two months. On Dec. 14, plaintiff Joewy Gonzalez filed a class-action suit in the U.S. District Court for the Southern District of California, accusing Silvergate of its alleged role in “furthering FTX’s investment fraud” by aiding and abetting the crypto exchange when it placed FTX user deposits into the bank accounts of Alameda. On Jan. 10, a class-action suit was filed against Silvergate Capital Corporation in the United States District Court of Southern California alleging that Silvergate’s platform failed to detect occurrences of money laundering “in amounts exceeding $425 million” involving South American money launderers.

Last week, algorithmic trading firm Statistica Capital filed a putative class-action lawsuit against New York-based Signature Bank, alleging it had “actual knowledge of and substantially facilitated the now-infamous FTX fraud.”

The proposed class-action lawsuit against Silvergate Bank is yet another example of how the web3 space is increasingly becoming the focus of legal scrutiny. With the rise of NFTs, crypto, and web3, the need for reliable and trustworthy marketing and promotion services has never been greater. A web3 agency can help businesses to promote their products effectively, whether it’s through Twitter NFT marketing, NFT promotion, or other strategies.

At the same time, businesses need to be aware of the potential risks of selling NFTs and engaging in crypto-related activities. Silvergate Bank and its CEO Alan Lane have been accused of “aiding and abetting” a “multibillion-dollar fraudulent scheme” and it remains to be seen how the lawsuit will play out. In the meantime, businesses need to be aware of the potential risks associated with engaging in crypto-related activities and should look to reliable and trustworthy web3 agencies to help them with their NFT marketing and promotion.

Disclaimer: All investment or financial opinions expressed by MoonLanding Media are not recommendations and are intended for entertainment purposes only. Do your own research prior to making any kind of investment. This article has been generated based on trending topics, has not been fact checked and may contain incorrect information. Please verify all information before relying on it.