• Silvergate Bank is facing a class action lawsuit for allegedly participating in SBF’s „multibillion-dollar fraudulent scheme.“
• Sequoia Capital, Thoma Bravo, and Paradigm Investments are also being sued for promoting FTX.
• Celebrities like Tom Brady and Larry David have also been targeted in lawsuits due to their involvement with FTX.
FTX Lawsuits Pile Up
Crypto exchange FTX went bankrupt last year, leaving a trail of lawsuits behind it. Major banks and venture firms face legal action for their alleged role in promoting or enabling Sam Bankman-Fried’s fraud. These include Silvergate Bank, Sequoia Capital, Thoma Bravo, and Paradigm Investments.
Silvergate Bank Lawsuit
On Feb. 14th, lawyers representing an FTX user filed a proposed class-action lawsuit against Silvergate Bank. The lawsuit accuses the bank of participating in a „multibillion-dollar fraudulent scheme“ by Sam Bankman-Fried (SBF). The plaintiff alleges that Silvergate knew about fraud in FTX but concealed the true nature of the exchange from customers. The US Justice Department is now looking into Silvergate’s dealings with FTX as part of a larger probe into SBF’s fraud.
Venture Firms Lawsuit
Another class-action lawsuit has set sights on venture firms such as Sequoia Capital, Thoma Bravo, and Paradigm Investments. The lawsuit claims these firms boosted FTX’s legitimacy through their investments and marketing campaigns – adding an “air of legitimacy” to the exchange which caused regular investors to underestimate risk associated with holding money there. The class action lawsuit accuses them of misrepresentation, false advertising, civil conspiracy and other violations.
Celebrities Targeted
Earlier lawsuits have targeted celebrities such as Tom Brady and Larry David who were involved with FTX prior to its collapse.
Conclusion
The collapse of crypto exchange FTX has left many banks and venture firms facing litigation over their alleged roles in promoting or enabling Sam Bankman-Fried’s fraud. Additionally celebrities like Tom Brady have been targeted due to their involvement with the platform prior to its bankruptcy filing.
