Silvergate Accused of “Aiding & Abetting” FTX Crash

Sahana Kiran
Source – CBS News

The FTX saga continues to take several twists and turns. Despite the fact that it collapsed back in Nov. 2023, the platform continues to remain the talk of the town. Now, several other firms are being dragged into the scene as well. Silvergate Bank has been one of them. More recently, the bank was accused of “aiding and abetting” the fraud carried out by Sam Bankman-Fried [SBF], the former CEO of FTX.

In a recent lawsuit, plaintiff Soham Bhatia took shots at Silvergate as well as its CEO Alan Lane. The lawsuit was filed in the United States District Court of the Northern District of California on Feb. 14. Bhatia is an FTX customer who went on blame Silvergate for masking “the true nature of FTX” from its users.

It should be noted that Silvergate was hit by a slew of lawsuits since December for its association with FTX.

The lawsuit read,

“By aiding, abetting, encouraging and substantially assisting the wrongful acts, omissions and other misconduct alleged above, Defendants acted with an awareness of their wrongdoing and realized that their conduct would substantially aid the accomplishment of their illegal design.”

Although the court has not yet evaluated and certified the claim, the plaintiff is asking for damages. Bhatia also sought disgorgement of earnings, the amount of which would be established during the trial, alongside restitution.

While Silvergate Capital Corp’s stock price had several plummeted over the last couple of weeks, it seemed to be recovering. Despite the latest lawsuit, the firm’s share price was at $18,07 with a 4.09% daily surge.

SBF along with his father and other FTX executives subpoenaed

Tuesday court filings revealed that SBF, his father Joseph Bankman, former Alameda CEO Caroline Ellison, FTX co-founder Gary Wang, and Nishad Singh were served subpoenas. These were sent out by bankruptcy administrators.

The subpoenas demand various records from Joseph Bankman, Ellison, Wang, and Singh by Feb. 16, while Bankman-Fried is scheduled for Feb. 17.

Additionally, Ellison and Wang both pleaded to fraud and are currently working with federal authorities. According to court documents Singh, who managed engineering at FTX, hasn’t been charged with any crime and has cooperated with law enforcement.