A U.S. federal judge has advanced a class lawsuit against Silvergate Bank that alleges it “aided and abetted” FTX’s fraud.
A federal judge struck down Silvergate’s dismissal bid of a lawsuit claiming it aided fraud at FTX saying the allegations were adequate to proceed.
The court found Silvergate owed a duty of care to FTX customers as its Silvergate Exchange Network — created to help move funds to crypto exchanges — was largely for the benefit of FTX customers and “that a crypto exchange like FTX was virtually impossible before the SEN.” “Silvergate had a strong incentive to continue accepting FTX and Alameda customer deposits and executing transfers because Silvergate’s business centered around the adoption of the FTX exchange platform and app.”
Silvergate made income on the translation fees and interest deposited in FTX-related accounts. The order claims Silvergate’s annual income before FTX was $7.6 million — jumping to $75.5 million after it banked the exchange.
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