FTX: Signature Bank Charged in Lawsuit, SBF Permitted to Contact Some Employees

Lavina Daryanani
Source: Bloomberg

FTX has been consistently making it to the cryptocurrency news headlines. Just a day back, it was reported that the exchange’s debtors sent “confidential letters” to political figures, political action funds, and other recipients of donation contributions. Now, FTX wants all the funds back by Feb. 28, 2023.

According to another development that has just unraveled, New York-based Signature Bank has been named in a lawsuit filed by investment firm Statistica Capital. The bank has been charged for playing a role in FTX’s collapse by authorizing the exchange to merge customer accounts with its blockchain network.

Also Read: Goldman Sachs Denies Being FTX’s Creditor

According to the plaintiffs, the bank did so despite noting suspicious FTX transfers via its Signet blockchain payment network. The 87-page complaint was filed on Monday in federal court in Manhattan. Statistica Capital lodged the case as a proposed class action. It intends to retrieve damages for itself and other entities that took a hit “as a result of Signature’s malfeasance.”

A recent Bloomberg report highlighted,

Signature had “actual knowledge” of the FTX fraud since at least June 2020 and “substantially facilitated” the fraud by publicly promoting the exchange and failing to “close, suspend or otherwise limit” Alameda or FTX accounts that were in violation of terms of service.”

In early December 2022, Signature Bank executive Eric Howell revealed plans to slash down the bank’s deposits tied to cryptocurrencies by as much as $10 billion. He affirmed that the same could be “easily” covered via cash and borrowings.

The FTX exchange was a client of Signature bank. In Q4 2022, the bank clarified that its deposit relationship with FTX and its related companies amounted to less than 0.1% of its overall deposits.

Read More: Signature Bank to Reduce Crypto-Tied Deposits by $10 Billion

FTX’s SBF permitted to contact former colleagues

According to another development, Sam Bankman-Fried has come to terms with federal prosecutors over his use of encrypted messaging apps and communications with his ex-employees.

He has reportedly concurred not to use encrypted messaging platforms like Signal. According to his revised bail conditions, Bankman-Fried will be permitted to send normal texts and make Zoom and Facetime calls. Additionally, he will be able to use WhatsApp on the condition of downloading surveillance technology on his phone.

The highlighted conditions were chalked out in a letter filed Monday by Bankman-Fried’s defense attorney. Prosecutors had requested a complete ban, suggesting that Bankman-Fried could engage in witness tampering. Resultantly, a hearing was scheduled for Thursday.

However, the former executive’s defense attorney asked for the hearing to be called off. He said that the parties had reached an agreement on a “specific set of former FTX employees” with whom Bankman-Fried will not communicate.

The official document did not reveal the people the former FTX executive agreed not to contact. However, Bloomberg revealed the attorney had earlier proposed a “group” for former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang.

Notably, Bankman-Fried used Signal to contact FTX US’s General Counsel last month. Furthermore, he emailed FTX’s new executive John J. Ray to meet up in New York.

Also Read: FTX Sends “Confidential Letters” Asking Politicians to Return Donations