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Post: Federal Judge Rules Against Silvergate in Lawsuit Tied to FTX Fraud

Federal Judge Rules Against Silvergate in Lawsuit Tied to FTX Fraud

Key Points:

  • Federal judge denies Silvergate’s dismissal bid of a lawsuit claiming it aided fraud at FTX.
  • Silvergate Bank facing a class-action lawsuit from FTX users who allege the bank aided fraud at the exchange and Alameda Research.
  • Judge rules that Silvergate owed a duty of care to FTX customers as its Silvergate Exchange Network (SEN) catered to FTX users.

1. Judge Denies Dismissal Bid:

A federal judge rejects Silvergate’s attempt to dismiss the lawsuit alleging its involvement in fraud at FTX, stating the allegations have merit to proceed.

2. Class-Action Lawsuit Against Silvergate:

FTX users are pursuing a class-action lawsuit against Silvergate Bank, accusing it of aiding fraud at the exchange and its affiliated trading firm, Alameda Research.

3. Duty of Care to FTX Customers:

The court determined that Silvergate had a responsibility towards FTX customers due to its Silvergate Exchange Network, which primarily benefited FTX users, indicating a level of involvement in the alleged fraud.

Hot Take:

The court’s decision to allow the lawsuit to proceed signifies a potential legal battle ahead for Silvergate Bank, raising questions about its involvement with FTX and the responsibilities towards its customers. This ruling highlights the increasing scrutiny and accountability within the cryptocurrency industry.

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