Cooperation with FTX for Silvergate will be expensive
2022.12.16 02:46
Cooperation with FTX for Silvergate will be expensive
Budrigannews.com – A legal claim against Silvergate Bank, Silvergate Capital Partnership and Silvergate President Alan Path was recorded at the California Southern Region Court concerning accounts held by troubled crypto organizations FTX and Alameda Exploration.
The suit seeks to hold Silvergate accountable for its alleged roles in depositing FTX user funds into Alameda’s bank accounts, which sparked panic in the crypto market and ultimately led to the bankruptcy of both companies.
Joewy Gonzalez, the plaintiff, filed the lawsuit on behalf of himself and others who were in the same situation. The plaintiff invested his savings in cryptocurrencies via the FTX exchange, which promised investors that they could “store assets securely as they gained in value, cash them out or trade them for other assets,” according to the lawsuit.
Through improper transfers, lending user funds, and comingling funds, the suit claims that Silvergate aided and abetted FTX’s fraudulent activities as well as the exchanges’ breaches of their fiduciary duty. The lawsuit claims that Silvergate is responsible for its part in “furthering FTX’s investment fraud” and is obligated to repay investors and the plaintiff.
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Girard Sharp and Hartley LLP is the plaintiff’s legal counsel. However, counsel for the defendants has not yet appeared as of this writing.
Three senators from the United States sent a letter to Silvergate on December 6 asking for clarification on the company’s role in the FTX collapse’s loss of billions of dollars. Congresspersons Elizabeth Warren, John Kennedy and Roger Marshall requested that Path furnish subtleties on the company’s relationship with FTX.
In the meantime, Embed, a stock-clearing platform, FTX Europe, FTX Japan, its derivatives exchange LedgerX, and FTX Europe’s lawyers have recently asked for permission to sell them off. The lawyers claim that an “expeditious sale process” is necessary because the businesses are under regulatory pressure, which puts their assets’ value in jeopardy.
