Silvergate Capital helped FTX and Alameda: Lawsuit filed

  • A lawsuit is filed by plaintiff Joewy Gonzalez on behalf of others affected. 
  • Silvergate Bank is accused of keeping users’ deposits in Alameda’s accounts. 
  • CEO Alan Lane is demanded by senators to spill the beans regarding FTX. 

FTX’s implosion has caused a market-wide panic, and authorities are trying to uncover all the perpetrators and accomplices of the financial crime. One of the major names that are coming up is Silvergate Capital, as its daughter company Silvergate Bank oversaw all the accounts related to, and Alameda. 

Authorities have filed a lawsuit against Silvergate Capital, Silvergate Bank and its CEO Alan Lane for their connection with now-bankrupt FTX. The lawsuit is filed in California Southern District Court, where the parent company is based. 

Silvergate’s connection with FTX. 

The filed lawsuit alleges that Silvergate kept users’ deposits in Alameda’s bank accounts. The plaintiff, Joewy Gonzalez, had filed a lawsuit on behalf of others affected by the collapse. Per the documents submitted, Joewy had his savings invested in digital assets on FTX. 

FTX had assured that investors should get high returns with their secured storage system. Also, they said that users could withdraw the assets anytime they want or trade them instead of tokens. 

Per the media reports, customers and investors are waiting to hear about their missing funds, which could total about $2 billion dollars. 

The suit refers to the fact that Silvergate had aided and assisted in the deceitful actions of FTX. This resulted in the exchange disobeying guardian duties by using improper transfers, mixing and lending users funds.

The lawsuit states that FTX must refund the plaintiff and all other investors. Girard Sharp and Hartley LLP are representing Gonzales. At the same time, the counsel of the defendants is yet to be announced. 

Lawmakers demand more information. 

In a December 6 letter, lawmakers have asked Silvergate to explain the details of customers’ funds. CEO Alan Lane is demanded to spill all the information regarding the company’s connection with FTX by Senators Roger Marshall, John Kennedy and Elizabeth Warren. 

FTX’s Backup Plan.

Sam is speculated to go behind bars for a long period of time. Earlier, his legal team hinted at fighting the extradition request but has now taken a U-turn. Bankman is awaiting the extradition hearing at Fox Hill prison till February 8, 2023. He is about to face strict trials for a battery of crimes committed by FTX and Alameda. 

In order to aid Sam in his trial, FTX lawyers have requested permission to sell other subsidiaries of the now-bankrupt crypto exchange. The list includes FTX Europe, FTX Japan, LedgerX and Embed. 

Lawyers explained that it should be beneficial to sell them as the value of these companies is suffering huge risks owing to the regulatory pressure on FTX.