Plaintiffs after the damages of the collapsed Silvergate bank joined forces through their respective suits.
Scott Corley, a U.S. District Judge of California combined 3 investors’ lawsuits against the futile crypto bank involving the bankrupt cryptocurrency exchange FTX. The State’s California judge agreed to combine 3 plaintiff’s lawsuits.
The lawsuit consists of accusations of the collapsed Silvergate Bank aiding and abetting investor fraud.
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More Details of the Case
On April 19, Scott Corley made a ruling, stating that the 3 lawsuits against Silvergate Bank will be consolidated.
The complainants accused Silvergate Bank of promoting investor fraud via the cryptocurrency exchange FTX. The three cases were filed by four former Silvergate investors.
The plaintiffs, whose names were Sonam Bhatia, Nicole Keane, and Golam Saline, filed the cases in February.
According to reports, they will be separated from other federal suits against FTX and Sam Bankman-Fried its founder. However, they will join the complainant’s mutual agreement.
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Statement of the Order
The order was that “the Silvergate Bank cases require common questions of law and evidence. Since the name defendants were in the reported course of conduct and declare the overlapping source of action. It made Silvergate cases right for consolidation”.
According to the plaintiffs, Silvergate Bank promotes FTX’s misconduct. Also, the bank enables illegitimate transfers of FTX customer funds to its branch trading company Alameda Research.
Backstory
Following the bank’s actions in March, it revealed its intentions to “voluntarily liquidate” assets and shut down operations.
Furthermore, it was also struck with a group-action lawsuit for securities law violations in January.
In November 2022, FTX filed for bankruptcy. Its failure and resultant negatively affected the crypto market.
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During Signature Bank’s case, the New York State financial regulator declared the reason it collapsed. He said it was due to the run from the vast base of depositors via business sectors.
He also maintained that the bank failure wasn’t caused by cryptocurrency. This happened in March after Signature Bank, a crypto-friendly bank underwent a seizure by federal regulators.
According to Adrienne Harris’s statement on April 19, “saying that the collapse of Signature Bank is related to crypto is a misnomer.
