U.S. resident Joey Gonzalez filed a class-action lawsuit against Silvergate Bank over the alleged role in transferring FTX users’ deposits to Alameda Research accounts.
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Silvergate Capital Corporation and CEO Alan Lane are also named as defendants. The plaintiff is represented by attorneys from the firm Girard Sharp and Hartley LLP.
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According to the complaint, Gonzalez “placed his funds with FTX” because it promised to “safely store the assets.” However, after the collapse of Sam Bankman-Fried’s empire, investors were “unable to recover their money” and faced “catastrophic losses.”
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“Without the plaintiff’s knowledge and that of other clients, Alameda and FTX acted as a single criminal organization under the control of Bankman-Fried. […] Alameda used investors’ funds for various unauthorized purposes,” the document states.
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Gonzalez claims that the bank “aided and abetted FTX in the fraud” through improper operations.
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“Silvergate also accepted deposits from FTX investors intended for safekeeping, exchange or cashing, which at Bankman-Fried’s direction were transferred directly to Alameda accounts and used for purposes other than their intended use,” the plaintiff stressed.
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In his view, Silvergate bears responsibility for its role “in facilitating FTX’s investment fraud” and is obliged to return the funds to the exchange’s customers.
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Earlier, Senators Elizabeth Warren, John Kennedy and Roger Marshall called on Lane to provide detailed information about Silvergate’s relationships with FTX entities.
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“The bank’s involvement in transferring customers’ funds from FTX to Alameda indicates that it appears to be a flagrant violation of duties to monitor suspicious financial activity conducted by its clients,” the senators stated.
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In November, Silvergate said that the deposits on FTX represented less than 10% of its deposits. The bank also disclosed that client deposits on BlockFi accounts do not exceed $20 million.
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On December 13, Bahamian authorities arrested Bankman-Fried at the request of the U.S. government. The court denied him bail of $250,000, and he will remain in custody at least until February 8, 2023.
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In the United States, prosecutors charged the head of the bankrupt exchange with eight criminal counts, including conspiracy and wire fraud. Taken together, he could face up to 115 years in prison.
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The founder of FTX has also faced lawsuits from U.S. regulators. The SEC charged Bankman-Fried with running a fraudulent scheme, deceiving investors and misusing customer funds. The CFTC charged him with violations of the Commodity Exchange Act.
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