A judge in California has consolidated three investor lawsuits against defunct cryptocurrency bank Silvergate Bank in relation to bankrupt cryptocurrency exchange FTX.
On April 19, Judge Jacqueline Scott Corley of the US District Court for the Northern District of California ruled to join the three lawsuits. Everyone accuses Silvergate of helping facilitate investor fraud through collapsed cryptocurrencyough exchange Silgrate FTX. ate by four former investors. They will be separated from other federal cases against FTX and its founder Sam Bankman-Fried, but will be consolidated by mutual agreement of the litigants, according to an April 19 report by Law360.
The command states: "The Silvergate case is amenable to consolidation because of the common issues of law and fact involved in the Silvergate case because they name common defenders, stem from the same course of alleged conduct, and assert overlapping causes of action." The Three lawsuits were filed in February by Matson Magleby, Golam Sakline, Nicole Keane and Sonam Bhatia.
The plaintiffs accused Silvergate of aiding and abetting FTX's alleged misconduct. The action included addressing the illegal transfer of FTX client funds to its sister trading firm, Alameda Research. bank run. Additionally, the bank was hit with a class-action lawsuit in January for violating securities laws.
FTX filed for bankruptcy last November, and its collapse and the resulting crash in the cryptocurrency market created liquidity problems for Silvergate. In a related development, New York state financial regulators said the collapse of Signature Bank was caused by alk from run on all deposits of life, not cryptocurrencies.
Crypto-friendly Signature Bank was seized by federal regulators in March. During an April 18 House Financial Services Committee hearing on stablecoins, New York State Department of Financial Services (NYDFS) Superintendent Adrienne Harris said: “It is a misnomer to relate the failure of Signature Bank to cryptocurrencies.”
She said depositors, including wholesale food suppliers, trustees, trust accounts and law firms, left the bank and led to the run, according to an April 19 Bloomberg report.
