Class action lawsuit claims Silvergate played role in FTX fraud

Quick Take

  • A class-action lawsuit alleges that Silvergate played an “integral” role in Sam Bankman-Fried’s financial crimes because it oversaw accounts belonging to FTX Ltd., FTX US and Alameda Research.

A class-action lawsuit claims that Silvergate Bank played an "integral" role in the alleged fraud at Sam Bankman-Fried's crypto exchange FTX. 

The plaintiffs are Joewy Gonzalez of Revere, Massachussetts, as well as "all others similarly situated" in the matter. They argue that the crypto bank is liable in the alleged fraud at the collapsed FTX exchange because it maintained accounts for the collapsed exchange and sister trading firm Alameda Research, aiding and abetting breach of fiduciary duty.

The lawsuit, filed in the U.S. District Court for the Southern District of California, claims that Silvergate had "plain sight" of crimes being committed because of the numerous accounts it held for FTX Ltd., FTX US and Alameda Research.

FTX founder and former CEO Sam Bankman-Fried was arrested on Dec. 12 in the Bahamas on charges that include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering. 

A bipartisan group of senators earlier this month said they wanted more information from Silvergate about its financial wellbeing and management of FTX and Alameda funds. The bank didn't immediately respond to a request for comment from The Block. 

Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions. 

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