The judge puts three lawsuits under one umbrella, as they all blame Silvergate Bank for helping FTX to fraud investors.
US District Judge for the Northern District of California Jacqueline Scott Corley connected three separate investor lawsuits against the now-defunct Silvergate Bank.
According to the article shared by Law360 on April 19th, all three lawsuits claim that Silvergate played a role in stealing investor funds through its ties with the fallen crypto exchange FTX.
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Four investors, Sonam Bhatia, Golam Sakline, Matson Magleby and Nicole Keane, filed the lawsuits in February.
In the filings, four investors accused Silvergate of knowingly supporting FTX's alleged misbehavior, such as processing fishy transfers of customer funds to its sibling trading firm, Alameda Research.
In the order regarding the cases, California Judge noted that as all lawsuit shares common legal and factual questions, consolidating these cases is the only logical move.
The Silvergate cases involve common questions of law and fact, as they name common defendants, arise from the same alleged course of conduct, and assert overlapping causes of action, such that the Silvergate cases are appropriate for consolidation.
It is worth noting that these lawsuits are set to remain separate from other federal cases against FTX and its co-founder, Sam Bankman-Fried. The mastermind behind FTX is set to face court in October.
Silvergate intended to "voluntarily liquidate" assets and cease operations in early March. To make matters worse, the bank faced a class-action lawsuit in January for violating securities law.
The stem of the problem came from FTX's bankruptcy filing in November of last year, which led to a massive market crash, causing liquidity issues for Silvergate.
The decision to consolidate the three investor lawsuits against Silvergate Bank highlights the complexities and intertwining nature of the crypto industry, raising questions about accountability and the role of financial institutions in this rapidly evolving space.
In other FTX-related news, Tribe Capital is reportedly considering the revival of the now-bankrupt cryptocurrency exchange FTX by injecting new capital into the firm.
