Statistica Capital, an algorithmic trading firm, has filed a lawsuit against crypto-friendly Silvergate Bank, saying the California-based financial institution was aware of FTX’s fraudulent activity.
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Silvergate Bank processed financial transactions for FTX and Alameda Research in its own blockchain payment network Signet even though it had “actual knowledge” of the FTX fraud since at least June 2020, Bloomberg reports, citing a court document.
In a complaint filed in Manhattan’s federal court, Statistica Capital said that Silvergate Bank failed to prevent FTX from the fraud and even helped the exchange by publicly promoting it.
Silvergate was one FTX’s banking providers. According to reports, the California-based bank was processing some of the exchange’s wire transfers to Alameda Research. In Q4, Silvergate suffered a net loss of $1 billion due to a “transformational shift” in the industry.
The bank added that “significant over-leverage in the industry” led to a “crisis of confidence,” forecasting a sustained period of lower deposits in the future.
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