Multiple Silvergate lawsuits over alleged FTX ties combined by judge

A California justice has combined 3 capitalist lawsuits against defunct crypto slope Silvergate Bank involving the bankrupt crypto speech FTX.

On April 19, United States District Judge Jacqueline Scott Corley of the Northern District of California ruled that the 3 lawsuits would beryllium consolidated. Each accuses Silvergate of helping to facilitate capitalist fraud by the collapsed crypto speech FTX.

The 3 cases were brought against Silvergate by 4 erstwhile investors. They volition stay abstracted from different national cases against FTX and its laminitis Sam Bankman-Fried but volition beryllium combined by communal statement of the litigants, according to an April 19 study from Law360.

The bid stated:

“The Silvergate cases impact communal questions of instrumentality and fact, arsenic they sanction communal defendants, originate from the aforesaid alleged people of conduct, and asseverate overlapping causes of action, specified that the Silvergate cases are due for consolidation.”

Matson Magleby, Golam Sakline, Nicole Keane, and Sonam Bhatia filed the trio of suits successful February.

The plaintiffs allege that Silvergate aided and abetted FTX’s alleged misconduct. Actions included processing illegitimate transfers of FTX lawsuit funds to its sister trading steadfast Alameda Research.

Silvergate disclosed its plans to “voluntarily liquidate” assets and unopen down operations successful aboriginal March pursuing a slope run. Additionally, the slope was deed with a class-action suit successful January for securities instrumentality violations.

FTX filed for bankruptcy successful November past twelvemonth and its illness and the resultant crypto marketplace clang created liquidity problems for Silvergate.

Related: What does the Silvergate illness mean for crypto?

In a related development, New York state’s fiscal regulator has said that the illness of Signature Bank was caused by a tally from a wide basal of depositors crossed concern sectors, not crypto.

Crypto-friendly Signature Bank was seized by national regulators successful March.

In a House Financial Services Committee proceeding connected stablecoins connected April 18, New York State Department of Financial Services (NYDFS) Superintendent Adrienne Harris said “it is simply a misnomer that the nonaccomplishment of Signature Bank was related to crypto.”

According to an April 19 Bloomberg report, she said that depositors including wholesale nutrient vendors, fiduciaries, spot accounts and instrumentality firms near the slope and caused the run.

Magazine: Unstablecoins: Depegging, slope runs and different risks loom