Your Own Liberty - Investing and Stock News
  • Investing
  • Stock
  • Latest News
  • Editor’s Pick
  • Economy
  • Investing
  • Stock
  • Latest News
  • Editor’s Pick
  • Economy
No Result
View All Result
Your Own Liberty - Investing and Stock News
No Result
View All Result
Home Investing

Class Action Suit Against Silvergate Bank Over FTX Fraud Allegations Moves Forward After Judge’s Ruling

by
March 22, 2024
in Investing
0
Class Action Suit Against Silvergate Bank Over FTX Fraud Allegations Moves Forward After Judge’s Ruling

FTX users are suing the now-defunct Silvergate by claiming it abetted FTX and its affiliated trading firm Alameda Research to commit a historic fraud.

According to the customers launching the suit, FTX knowingly transferred customer money into Alameda Research. FTX is currently on trial for numerous offences related to fraud and money laundering charges.

Central to the case is the allegation that FTX illegally wired Alameda Research customer funds to cover the cracks in its balance sheet after the trading company made some risky crypto bets.

On March 20, Judge Ruth Bermudez Montenegro of a San Diego federal court filed an order denying Silvergate’s motion to dismiss the case.

Montenegro ruled that the customers had adequately presented a case for Silvergate knowing and participating in FRX’s fraud in their filing on March 19.

“It was foreseeable that allowing FTX customer funds to be deposited into non-FTX accounts would lead to fraud and harm the owners of those funds,” said the order.

The numbers ostensibly speak for themselves. According to the order, Silvergate’s annual income before taking on FTX as a client was $7.6 million. The bank’s post-FTX income was nearly ten times higher, at $75.5 million, through transaction fees and interest on money deposited in FTX and Alameda accounts.

The court also ruled that Silvergate’s earlier assertion that it doesn’t owe a duty of care to FTX customers is incorrect. Silvergate’s argument rests on the fact that the bank was not directly responsible for the withdrawal freezes that spread panic when FTX began to collapse.

The bank also argued that had it not dealt with FTX, the exchange would have found another bank, an assertion that the judge labeled called “highly speculative” because Silvergate “one of few banks willing to service the crypto industry.”

Like Silvergate: 3AC Also Denies Wrongdoing


Another company at the heart of 2022’s industry-wide recession, dubbed “crypto winter”, came under media scrutiny this week after its co-founder denied responsibility in the collapse.

Kyle Davies, the founder of collapsed crypto hedge fund Three Arrows Capital (3AC) told his interviewer in the latest episode of Unchained that he feels he has nothing to apologise for. 

“Am I sorry for a company going bankrupt? No, like companies go bankrupt, almost every company goes bankrupt, right?” reasoned Davies, in response to criticisms that he had shown no remorse when his company failed. 

In May 2022, a huge crypto project called Terra collapsed when its dollar-pegged stablecoin UST slipped its peg and spiralled down to nothing.

Terra sold UST on the promise that an algorithm could peg it to the greenback by burning $1 dollars worth of a sister token called LUNA to create it. In order to redeem it, holders burned UST for equivalent amounts of LUNA. 

The mechanism failed, however, after too many people exited UST at once, causing the algorithm to nosedive into a hyper-inflationary spiral.

At the time when Terra collapsed, 3AC had $200 million to half a billion LUNA tokens. The industry-wide contagion from UST’s historic depegging is also considered a factor in FTX’s downfall. 

The post Class Action Suit Against Silvergate Bank Over FTX Fraud Allegations Moves Forward After Judge’s Ruling appeared first on Cryptonews.

Previous Post

Best Crypto to Buy Today March 22 – APT, ICP, FTM

Next Post

Worldcoin Orb Software Goes Open-Source — What Does it Mean for User Data Privacy?

Next Post
Worldcoin Orb Software Goes Open-Source — What Does it Mean for User Data Privacy?

Worldcoin Orb Software Goes Open-Source — What Does it Mean for User Data Privacy?

Enter Your Information Below To Receive Trading Ideas and Latest News

    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    Popular News

    OpenAI to release web browser in challenge to Google Chrome

    OpenAI to release web browser in challenge to Google Chrome

    July 18, 2025
    Congress sends $9B spending cuts package to Trump’s desk after late-night House vote

    Congress sends $9B spending cuts package to Trump’s desk after late-night House vote

    July 18, 2025
    Boeing delivers most airplanes since late 2023 after ramping up 737 Max output

    Boeing delivers most airplanes since late 2023 after ramping up 737 Max output

    July 17, 2025

    About Proud For Profits

    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Main Categories

    • Investing
    • Stock
    • Latest News
    • Editor’s Pick
    • Economy

    Latest News

    • OpenAI to release web browser in challenge to Google Chrome
    • Congress sends $9B spending cuts package to Trump’s desk after late-night House vote
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Copyright © 2025 yourownliberty.com | All Rights Reserved

    No Result
    View All Result
    • Investing
    • Stock
    • Latest News
    • Editor’s Pick
    • Economy

    Copyright © 2025 yourownliberty.com | All Rights Reserved