Silvergate Bank as defendants in a proposed class-action lawsuit from an FTX user

In a newly proposed class-action lawsuit, Silvergate Bank and its CEO Alan Lane have been accused of “aiding and abetting” a “multibillion-dollar fraudulent scheme orchestrated by Sam Bankman-Fried (SBF)” and two of Sam Bankman-entities, Fried’s FTX and Alameda Research. This accusation comes in the context of a “multibillion-dollar fraudulent scheme orchestrated by Sam Bankman-Fried (SBF).”

On February 14, 2019, a proposed class-action lawsuit was submitted to the United States District Court for the Northern District of California by attorneys representing a San Francisco-based FTX user who had approximately $20,000 worth of cryptocurrency frozen after the exchange went out of business the previous year.

Plaintiff Soham Bhatia claims that Silvergate Bank, its parent company Silvergate Capital Corporation, and CEO Alan Lane were aware of the use of FTX customer funds by Alameda Research, and she has accused them of concealing “the true nature of FTX” from its customers. Bhatia is suing Silvergate Bank, Silvergate Capital Corporation, and CEO Alan Lane.

According to the lawsuit, “At all relevant times, Silvergate, Bankman-Fried, and Lane were each a co-conspirator of the other,” with the following addition: “The lawsuit alleges Silvergate and Lane aided, abetted, encouraged, and substantially assisted Bankman-Fried in jointly perpetrating a fraudulent scheme upon Plaintiff and the class.”

“By aiding, abetting, encouraging, and substantially assisting the wrongful acts, omissions, and other misconduct alleged above, Defendants acted with an awareness of their wrongdoing and realized that their conduct would substantially aid the accomplishment of their illegal design,” the complaint states. “In addition, Defendants acted with the knowledge that their actions would substantially assist the accomplishment of their unlawful design.”

The lawsuit asks for a variety of remedies, including damages, restitution, and a proportionate share of the defendant’s earnings, with the precise amount being decided during the trial.

However, the complaint has not yet been certified as a class action by the district court, which is an essential step that must be completed before the case can go forward.

The most recent potential legal action against Silvergate is yet another class-action complaint that has been filed against the company during the last two months.

Plaintiff Joewy Gonzalez filed a similar class-action suit against Silvergate on December 14 in the United States District Court for the Southern District of California, accusing Silvergate of its alleged role in “furthering FTX’s investment fraud” by aiding and abetting the cryptocurrency exchange when it placed FTX user deposits into the bank accounts of Alameda. Gonzalez’s suit alleges that Silvergate played a role in “furthering FTX’s investment fraud” by placing FT

A class action lawsuit against Silvergate Capital Corporation was submitted to the United States District Court for the Southern District of California on January 10, alleging that Silvergate’s platform failed to detect instances of money laundering “in amounts exceeding $425 million” involving South American money launderers. The lawsuit was brought against Silvergate Capital Corporation.

There have been allegations leveled against other businesses that are similar in nature.

The algorithmic trading business Statistica Capital has filed a putative class-action lawsuit against the New York-based bank Signature Bank, saying that Signature Bank “really knew of and materially supported the now-infamous FTX scam.” The case was filed on February 6 of this past week.

The report said in its writing that “in particular, Signature knew of and enabled the commingling of FTX client money inside its proprietary blockchain-based payments network, Signet.”


Tagged : / / / /

FTX investors file class-action suit against Sequoia

According to reports, users of the now-defunct cryptocurrency exchange FTX have taken aim at financiers who marketed the platform, arguing that their efforts provided a “air of legitimacy” to the now-defunct exchange in a situation that has been described as “tricky” by a cryptocurrency attorney.

According to a story that was published by Bloomberg on February 15th, FTX investors had filed a class-action lawsuit on February 14th against the venture capital company Sequoia Capital as well as the private equity companies Thoma Bravo and Paradigm.

The investors said that the companies were promoting “their own investments” in FTX, which amounted to hundreds of millions of dollars.

It was stated that the companies participated in a promotional marketing campaign in 2021, which the investors said gave the discredited cryptocurrency exchange a “air of credibility.”

The three companies were all investors in FTX’s $900 million Series B round, which took place in July 2021. This was the biggest raise in the history of cryptocurrency, and individual partners at each of the three companies spoke favorably of former FTX CEO Sam Bankman-Fried at the event.

Matt Huang, one of the co-founders of Paradigm, issued a statement in the wake of the fundraising announcement in July 2021, in which he referred to Bankman-Fried as a “unique” entrepreneur who is “stunningly ambitious.”

He went on to say that despite the fact that Sequoia did not do its due diligence to a particularly high standard, the company is not “liable to others.”

The fact that there is no evidence to imply that Sequoia wasn’t “playing within the regulatory guidelines” led Hennessy to assume that it was a matter of “buyer beware.”

According to a separate report published by Bloomberg on February 15, it was revealed that in the same court filing, Sam Bankman-Fried and his father, along with former executives of FTX and Alameda Research named Caroline Ellison, Nishad Singh, and Gary Wang, were all served with a subpoena, which is an order compelling a person to appear in court in order to provide additional evidence.

It was said that Sam Bankman-Fried is likely to show up in court on February 17, while Joseph Bankman, Ellison, Wang, and Singh are scheduled to appear in court on February 16.


Tagged : / / / / / / / / /

Celsius Creditors to Sue Executives for Fraud

It has been proposed by the official committee of Celsius creditors that a lawsuit be filed against the company’s co-founder Alex Mashinsky and other executives for “fraud, recklessness, gross mismanagement, and self-interested conduct,” all of which contributed to the ultimate failure of the cryptocurrency lender.

Attorneys for the Official Committee of Unsecured Creditors said in a proposed complaint that was submitted to a New York Bankruptcy Court on February 14 that the action comes after six months of inquiries into Celsius’ current and past directors, officials, and employees.

The U.S. Trustee selected seven Celsius account holders to serve on the committee this past July. The group was established by the U.S. Trustee. Along with the interests of unsecured creditors, the committee acts as a representative for those who possess Celsius accounts.

According to documents written by attorneys from White & Case LLC, “The Committee’s inquiry has discovered substantial claims and causes of action based on fraud, negligence, gross mismanagement, and self-interested behavior by the Debtors’ former directors and officers.”

The planned legal action intends to file claims and causes of action against the following Celsius executives, people, and businesses that are affiliated with them:

The attorneys wrote in their letter that “Mr. Mashinsky, Mr. Leon, Mr. Goldstein, Mr. Beaudry, Ms. Urata-Thompson, and Mr. Treutler breached their fiduciary obligations to Celsius.” They went on to say that “those parties were aware Celsius was promising its customer’s interest payments that it could not afford and did nothing to fix the problem.”

The lawyers have also alleged that the executives made “negligent, reckless investments” that caused Celsius to lose $1 billion in a single year, while mismanagement led to another quarter-billion dollar loss “because they could not adequately account for the company’s assets and liabilities.” This loss was attributed to the fact that the executives “could not adequately account for the company’s assets and liabilities.”

According to the allegations made by the plaintiffs, “after that loss, they did not invest in or enhance the company’s systems to appropriately solve the problem, which resulted in subsequent losses.”

The motion also alleges that the executives of Celsius directed the company to spend “hundreds of millions of dollars” on public markets to artificially inflate the price of CEL tokens, while at the same time the executives “secretly sold tens of millions of CEL tokens” for their own benefit.

They did nothing except observe as Mr. Mashinsky carelessly gambled hundreds of millions of dollars on how the cryptocurrency market would move as they did so. They covered up Mr. Mashinsky’s persistently dishonest statements on Celsius’ investments and financial situation.

The attorneys continued by saying that “finally, when it became apparent that Celsius would be required to file for bankruptcy, the Prospective Defendants withdrew assets from the sinking ship while actively encouraging customers to keep their assets on the Celsius platform,” the prospective defendants did this.

The creditors committee of Celsius said that the planned lawsuit was just the “first of many stages” in their inquiry into suspected wrongdoings committed by former Celsius executives and the restitution of assets to victims.

On March 8, there will be a hearing on the planned complaint that was submitted.


Tagged : / / / /

What the U.S. Congress Decides on Crypto Will Ultimately Overstepping their authority

The policy expert for the cryptocurrency advocacy group Blockchain Association says that despite attempts to police cryptocurrency through enforcement actions, United States financial regulators “are bound by legal reality,” and Congress will ultimately decide what regulations should be put in place for cryptocurrencies.

Jake Chervinsky, the chief policy officer of the organization, contributed his thoughts to a lengthy Twitter conversation on the topic of the current status of crypto policy on February 14.

He made the observation that the Securities and Exchange Commission as well as the Commodity Futures Trading Commission “do not have the ability to completely oversee cryptocurrency.”

Given the ideological divide that exists between the House Republicans and Senate Democrats, Chervinsky is of the opinion that a compromise on the crypto legislation is “unlikely.” He said that the Securities and Exchange Commission and the Commodity Futures Trading Commission had exceeded their powers in an effort to “get things done” without Congress.

Chervinsky issued a plea for the sector to maintain its composure in the wake of the recent flurry of action from the SEC, which he referred to as “crypto’s biggest opponent.” As an example, Chervinsky cited the SEC’s crackdown on staking services.

The settlement that the SEC reached with the cryptocurrency exchange Kraken on February 9, which forbade Kraken from ever selling staking services to consumers in the United States, has been publicly criticized by SEC Commissioner Hester Peirce.

Peirce expressed his disagreement with the majority opinion in a statement dated February 9, in which he said that regulating a growing business via enforcement “is neither an effective or equitable manner of governing” the industry.

It was proposed by Chervinsky that litigation is one method the cryptocurrency business may press for appropriate legislation. Chervinsky said that the court plays a key role in influencing policy that has been “ignored.”

Coinbase, a cryptocurrency exchange, is also the subject of an SEC investigation that is similar to the one that led to Kraken’s settlement.

A more stronger position has been adopted by Coinbase CEO and co-founder Brian Armstrong, who believes that it would be disastrous for the United States to do away with staking for cryptocurrencies.

In a tweet dated February 12, Armstrong contended that Coinbase’s staking services are not securities and said that he would “gladly defend this in court if it were necessary.”

The decisions that judges make in important cases establish new standards in the law. If such a case were to be taken before a court and the judge concluded that Coinbase’s staking services did not qualify as securities, then other cryptocurrency businesses who are in a situation comparable to Coinbase’s may utilize the precedent as part of their defense.


Tagged : / / / / / / / / / / /

Former FTX CEO Sam Bankman-Fried Used VPN

The prosecutors who are handling the criminal case against Sam Bankman-Fried, the former chief executive officer of FTX, have asked for more time to investigate the potential legal ramifications of Bankman-use Fried’s of a virtual private network, sometimes known as a VPN.

The United States Attorney for the Southern District of New York, Damian Williams, stated in a document that was filed on February 13 with the United States District Court for the Southern District of New York that the Justice Department had discovered that Bankman-Fried accessed the internet on January 29 and February 12, with the latter date being the day of Super Bowl LVII. Williams claims that the government’s position was that the use of a virtual private network (VPN) “raises several potential concerns.” He cites the example of users based in the United States accessing certain international crypto exchanges, as well as the obscuring of data from websites that Bankman-Fried may be visiting.

In the petition, it was said that using a virtual private network (VPN) “allows data transfers without discovery via a secure, encrypted connection [and] is a more secure and covert manner of accessing the dark web.” “The defense contends that the defendant was not making use of a virtual private network (VPN) for any unlawful purpose, and it has stated that it would appreciate the chance to engage in negotiations with the government about the problem,”

Mark Cohen, an attorney with the company Cohen & Gresser who is defending SBF in the criminal action, claims that the former CEO of FTX utilized the VPN to watch sporting events, including the Super Bowl. He went on to say that until the controversy was settled among attorneys, Bankman-Fried would not employ a virtual private network (VPN).

“He watched the AFC Championship game on January 29, 2023, as well as the NFC Championship game, then he watched the Super Bowl on February 12, 2023. This usage of a virtual private network does not give rise to any of the concerns expressed by the government in its letter.

According to the court filing, Bankman-legal Fried’s team was reportedly considering whether the usage of a virtual private network (VPN) by the former CEO of FTX may be added as a condition of his release. Since SBF was arrested, the prosecution has already requested that the court place restrictions on Bankman-use Fried’s of specific messaging applications and order her to desist from making contact with current or former workers of FTX and Alameda Research. The attorneys for Bankman-Fried and the U.S. prosecutors have asked further time until February 17 to explore the potential implications of SBF utilizing a virtual private network (VPN) for his bail terms.

The criminal trial against Bankman-Fried is slated to begin in October, and he is expected to face eight charges connected to wire fraud and breaches of regulations governing campaign money. The civil lawsuits that SBF is facing from the United States Securities and Exchange Commission and the Commodity Futures Trading Commission will be put on hold until the end of the criminal case, according to a ruling that was handed down on February 13 by a court.


Tagged : / / / / /

Eddy Alexandre Pleads Guilty to Commodities Fraud

In a New York district court, Eddy Alexandre, the CEO of a putative cryptocurrency trading platform known as EminiFX, pled guilty to commodities fraud. As part of his plea deal, he agreed to pay back millions of dollars to investors who had lost money due to his “cryptocurrency investment hoax.”

On February 10, the Department of Justice (DOJ) of the United States of America made the announcement that Alexandre had pleaded guilty to one count of commodities fraud. Alexandre will pay approximately $248 million in forfeiture in addition to restitution, the amount of which has not yet been determined.

In May, Alexandre was arrested and prosecuted for his part in EminiFX. He first pled not guilty to the charges, but on February 10 he changed his plea to guilty. He might get a term of up to ten years in jail if convicted.

Between approximately September 2021 and May 2022, Alexandre allegedly ran the crypto and forex trading platform and “solicited more than $248 million in investments from tens of thousands of individual investors,” as stated by Damian Williams, the United States Attorney for the Southern District of New York.

According to Williams, Alexandre claimed that EminiFX could provide “monthly returns of at least 5%,” but in fact, the CEO didn’t invest a “significant amount” of the money and “even utilized some funds for personal expenditures.” Williams alleged that Alexandre lied about EminiFX.

He promoted EminiFX as a platform for earning passive income by virtue of its use of a top-secret new technology for automating trading in crypto and foreign currencies, which allegedly “guaranteed” the returns on investment that were advertised.

Alexandre avoided answering the investors’ questions on the nature of the technology but assured them that they would see a return on their investments in just five months. Investors in the scam were given misleading information to the effect that they had obtained the promised 5% returns on their investments.

In point of fact, Alexandre lost tens of millions of dollars on the cash that he did invest; nevertheless, he did not make this information known to the investors.

He also transferred over 14.7 million dollars to his own personal bank account, spent approximately 155,000 dollars on the purchase of a BMW, and more than that amount on the monthly payments for a Mercedes-Benz.

Despite the fact that Alexandre committed fraud, he retained the support of a number of the investors in EminiFX.

According to a story published on the 10th of August by Bloomberg, a few individuals flew from outside the country to attend a plea hearing in August. One of Alexandre’s supporters said that the prosecution against him was racially motivated.

In addition to this, he is being sued in a separate civil case by the Commodity Futures Trading Commission (CFTC), which claims that Alexandre engaged in “fraudulent solicitation and misappropriation” in connection with cryptocurrency and foreign exchange trading.


Tagged : / / / / /

BAYC Copycat NFT Collection’s Founder Files Opposition being filed

An objection notice was filed against Yuga Labs’ 10 trademark registrations by one of the original creators of the Bored Ape Yacht Club (BAYC) imitation NFT collection, RR/BAYC.

This action signals yet another bizarre turn in the continuing fight over intellectual property between the people who created BAYC, Yuga Labs, and the people who founded RR/BAYC, Jeremy Cahen and Ryder Ripps.

On February 9, Cahen submitted the objection notice to the Trademark Trial and Appeal Board of the United States Patent and Trademark Office (USPTO). At the time that this article was being written, the opposition status on each and every trademark application was listed as “pending.”

The majority of Yuga Labs’ trademark applications were sent in during the second half of the year 2021. They went through a number of BAYC logos, pieces of artwork, and branding that may potentially be used across a variety of digital goods, such as artwork based on nonfungible tokens (NFTs), trading cards, and metaverse wearables.

The files also include a potential for tangibly produced BAYC goods such as apparel, jewelry, watches, and keychains, in addition to the possibility of providing entertainment services like as gaming, television, and music.

In an interview on the 11th of February with Bloomberg Law, a spokeswoman for Yuga Labs played down the possibilities of Cahen’s challenge being successful and said that the action was only another effort to generate difficulty for the company.

Jeremy Cahen’s filing is just another attempt to distract from the real issue at hand, which is his infringement of the Yuga intellectual property, they said. “The Trademark Office has preliminarily approved Yuga Labs’ trademark applications for registration, and we look forward to their full approval in due course,” they added.

Cahen provides a comprehensive list of “grounds for disagreement” to the files made by Yuga Labs in the notice that he submitted. In particular, Cahen asserts that the corporation “abandoned all rights” to certain logo and artwork designs as a result of BAYC NFT sales transferring “all rights” to the digital pictures’ owners. Cahen bases this argument on the fact that the company sold BAYC NFTs.

In addition to this, he asserts that Yuga Labs is not the legitimate owner of certain skull designs since the company is said to have transferred ownership of these rights to the ApeCoin decentralized autonomous organization (DAO) in March of 2022.

In addition, Cahen contends that Yuga Labs failed to provide a “bona fide intent to lawfully use” the trademarks in its filings, despite the fact that NFTs ought to be registered and categorized as securities in accordance with federal law. Cahen’s argument is based on the fact that NFTs should be registered.

Yuga Labs, the company that developed BAYC, filed a lawsuit against digital artists Ryder Ripps and Cahen in June 2022, accusing them of exploiting BAYC graphics in their RR/BAYC collection. The company also claimed that the two individuals were purposefully “trolling Yuga Labs and tricking customers” into buying their imitation NFTs. This was an additional allegation made by the company.

Cahen’s action comes only three days after Yuga Labs resolved a separate case against RR/BAYC website and smart contract creator Thomas Lehman. Cahen’s move also comes just three days after Yuga Labs’s settlement.

As part of the agreement, Lehman basically consented to a permanent injunction that prevents him from taking part in future “confusingly comparable” BAYC-related ventures. This provision was included in the settlement. Lehman has distanced himself from Ryder Ripp and Cahen in a statement that he has released.


Tagged : / / / /

Guarantors of Sam Bankman-Fried’s Bail Bond signed off

For the time being, neither of the two guarantors who endorsed a portion of Sam Bankman-250 Fried’s million dollar bail bond will have their identities revealed to the public.

A court has also decided against an arrangement that would have allowed Bankman-Fried to use certain messaging applications. This decision was made by the judge.

On February 7, at the very last minute, the attorneys for Bankman Fried submitted an appeal to stop the publishing of the identities of the guarantors. The appeal did not include any further grounds against the disclosure; nonetheless, it will delay the enforcement of the order until February 14 in order to permit an application for a second stay of execution.

Following the judgement that took place on January 30 in which United States District Judge Lewis Kaplan approved a combined petition from eight prominent media sites seeking to unseal the guarantors’ identities, it was anticipated that the appeal would be filed.

Given the unprecedented nature of the situation, Kaplan pointed out that it was quite possible that his ruling would be challenged in court.

He stated that the arguments made by Bankman-lawyers Fried’s that guarantors “would face similar intrusions” as Bankman-parents Fried’s lacked merit given that the size of their individual bonds was much smaller, at $200,000 and $500,000. He said that Bankman-lawyers Fried’s had no right to make those arguments.

Joseph Bankman and Barbara Fried, Bankman Fried’s parents, were the other two parties that signed off on the bond. The bond was approved by all four parties.

In addition, the court said that the guarantors had freely signed individual bonds in a “well publicized criminal procedure,” and had thus placed themselves up to the scrutiny of the general public as a result of their actions.

In the meanwhile, on February 7th, Kaplan decided against approving a joint agreement that had been negotiated between Bankman-legal Fried’s team and the prosecution. This agreement would have changed Bankman-bail Fried’s restrictions and enabled him to use certain messaging applications.

Although Kaplan did not cite a rationale for refusing the request, he did mention that more discussion on the topic will be place at a hearing scheduled for February 9.

After it came to light that the former CEO had been communicating with both current and former members of staff, Judge Kaplan issued a ruling on February 1 that prohibited Bankman-Fried from contacting employees of FTX or Alameda Research. The judge justified this decision by citing the potential for “inappropriate contact with prospective witnesses.”


Tagged : / / / / /

CEO Sues Board Members for Seizing Control of Crypto Miner

The Chief Executive Officer of the cryptocurrency miner Layer1 Technologies has filed a lawsuit against the other two board members of the business, one of whom being Jakov Dolic, the co-founder of the company. The complaint alleges that the defendants violated several policies and procedures of the company. This allegation is reinforced by the plaintiff’s charges, which state that the defendants improperly appropriated Layer1’s activities for their own benefit. The plaintiff is the one who brought this lawsuit.

The action against Dolic and fellow board member Tobias Ebel was filed with the Delaware Chancery Court on February 2, by John Harney, the Chief Executive Officer of Layer1, and DGF Investments Inc., an investment corporation having its home in the British Virgin Islands. Dolic and Ebel were named as the targets of the lawsuit. When the complaint was first filed against Dolic and Ebel, it was Harney and DGF Investments Inc. who were the ones to commence the legal proceedings by doing so.

The complaint alleges that both Dolic and Ebel took advantage of a lack of leadership at Layer1’s equity parent Enigma in order to gain control of the Bitcoin mining firm and manage it as their “own personal fiefdom.” The complaint also alleges that they did this in order to enrich themselves financially. This is what the claims that are included in the complaint allege to be the case. It is speculated that this took place at Enigma, the equity parent company of Layer1, and that a power vacuum was used in order to accomplish the task.

Harney and DGF Investments Inc., which owns a majority stake in Enigma, claim that the defendants have “usurped the authority” of Layer1’s CEO and prevented Harney from “responsibly operating Layer1.” They say this happened because the defendants “obstructed” Harney’s ability to “responsibly operate Layer1.” They claim that this occurrence had place as a result of the defendants’ “obstruction” of Harney’s capacity to “responsibly run Layer1.” They claim that this happens because of the interference that the defendants provide, which precludes Harney from “responsibly running Layer1.” Both of these accusations are being brought up as potential claims in the legal action that has been taken against the defendants.


Tagged : / / / / / / / /

Former Coinbase Product Manager Seeks to Dismiss SEC Charges of Insider Trading

A former product manager at the cryptocurrency exchange Coinbase has made a formal request to have the allegations of suspected illegal insider trading dropped against them. Since the tokens that are being alleged to have been traded by him are not securities, his legal team believes that the charges should be dismissed as groundless. The fact that this is the case is the primary justification for dismissing the charges.

Ishan Wahi, a former employee of Coinbase, and Nikhil Wahi, his brother, are both being represented by attorneys who, on February 6, filed a motion in the United States District Court for the Western District of Washington requesting that the charges brought against them by the Securities and Exchange Commission be dropped. Ishan Wahi is also being represented by his brother, Nikhil Wahi. Nikhil Wahi is also being represented by attorneys. Attorneys are also defending Nikhil Wahi’s interests in this case. Ishan Wahi was a member of the Coinbase team in the past.

The SEC filed charges of insider trading against the brothers and their associate Sameer Ramani in July of last year, alleging that the three of them made $1.1 million using Ishan’s tips on the timing and names of tokens in upcoming Coinbase listings. The SEC filed these charges against the brothers and their associate Sameer Ramani. These allegations were brought against both of the brothers as well as their colleague Sameer Ramani by the SEC. Additionally, allegations were made against Sameer Ramani that he engaged in insider trading.

The attorneys prepared a report that was more than 80 pages long and in it they described the many ways in which the SEC’s statements were “incorrect.”

They stated that the bitcoins that were supposedly sold by the Wahi family did not satisfy the legal definition of a security since they did not have a “investment contract written or inferred.” This was the basis for their argument. To put it another way, there was neither a written nor an inferred agreement between the parties to invest in the bitcoins. Instead, they compared bitcoins to collectibles like baseball cards and stuffed animals, like stuffed animals and stuffed animals.


Tagged : / / / / / /
Bitcoin (BTC) $ 27,053.25 0.57%
Ethereum (ETH) $ 1,684.19 0.69%
Litecoin (LTC) $ 66.22 0.78%
Bitcoin Cash (BCH) $ 236.74 1.67%