Judge Combines Silvergate Lawsuits Alleging FTX Connection

• California Judge combines multiple investor lawsuits against the now-collapsed Silvergate bank.
• These lawsuits are allegedly in involvement with SBF’s FTX.
• Silvergate is accused of facilitating investor fraud.

A California judge combines multiple investor lawsuits against the now-collapsed Silvergate Bank with alleged ties to FTX. According to the report from LAW360, United States District Judge Jacqueline Scott Corley of the Northern District of California announced the consolidation of three lawsuits.

What’s common about these three lawsuits is that all of them are linked with allegations against Silvergate Bank for aiding investors to facilitate fraud by the FTX exchange.

Four former investors brought three cases against Silvergate, and the parties have agreed to combine them. These cases will not be merged with other federal cases against FTX and its founder, Sam Bankman-Fried.

According to the court order: 

The Silvergate cases involve common questions of law and fact, as they name common defendants, arise from the same alleged course of conduct, and assert overlapping causes of action, such that the Silvergate cases are appropriate for consolidation.

The three lawsuits that are being combined by the judge were filed in February by Matson Magleby, Golam Sakline, Nicole Keane, and Sonam Bhatia. The parties alleged that the now-collapsed Silvergate Bank aided FTX in its illegal activities. These include the transfer of unaccounted funds to Alameda Research.

Silvergate has been a prominent bank for cryptocurrency companies, alongside New York-based Signature Bank. FTX, a bankrupt cryptocurrency exchange, was one of Silvergate’s major clients. On March 8, 2023, the bank announced its decision to liquidate and wind down operations.

The bank cited recent regulatory and industry developments as the primary reason for the decision to close the bank.