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Soham Bhatia is one of the millions of FTX customers whose funds have been locked following the defunct cryptocurrency exchange’s involvement in a multibillion-dollar fraudulent scheme.
However, Bhatia has taken extra steps by filing a class action complaint against Silvergate Bank and its parent company, Silvergate Capital Corporation, for their alleged role in aiding and abetting the fraudulent scheme orchestrated by Sam Bankman-Fried (SBF) through FTX and Alameda Research.
Bhatia, along with other FTX victims, has accused Silvergate Capital CEO Alan J. Lane of knowingly assisting SBF in laundering billions of fraudulent assets. According to the complaint filed in the District Court of Northern District California, Silvergate Capital’s Silvergate Exchange Network (SEN) allowed FTX to have a 24/7 crypto-fiat exchange, and therefore, Silvergate was complicit in FTX’s fraudulent activity.
Bhatia also accused Silvergate of not calling out FTX while it transferred billions of users’ digital assets to Alameda, which were later used to pay for the latter’s debts. As a result, over $8 billion of customers’ funds were lost and may never be recovered due to the mismanagement by FTX and Alameda.
It is worth noting that Bhatia and Silvergate Capital, as well as the company’s CEO, are subject to the rules of the Federal Reserve Bank of California.
Silvergate’s Market Outlook
Despite ongoing investigations into FTX, Silvergate Capital, with over 90% of its operations focused on crypto assets, has attracted notable institutional investors.
Citadel Securities, a market maker, purchased a 5.5% stake in Silvergate worth approximately $25 million. In addition, BlackRock, a hedge fund with over $10 trillion in assets under management, announced a 7.2% stake in Silvergate Capital as of December 31.
On Tuesday, SI shares gained over 18%, closing the day’s trading at $17.36.