In a lawsuit brought by an investment firm, Signature Bank was accused of helping to cause the failure of the FTX cryptocurrency exchange by allowing the now-defunct cryptocurrency exchange to commingle client accounts with its blockchain network.
Statistica Capital Ltd. alleged in a lawsuit filed Monday in federal court in Manhattan that Signature carried out these actions despite noticing suspicious FTX transactions taking place over its Signet blockchain payment network.
How is signature bank linked?
The bank announced in December that it intends to cut as much as $10 billion in deposits from digital asset clients as part of a widespread pullback from the crypto industry in the wake of the FTX blowup, as per a report by Bloomberg. This comes as the bank embarks on a widespread withdrawal from the industry. According to the data provided by the firm in November, deposits from FTX made up less than one-tenth of one percent of the bank’s total deposits as of November 14.
According to the 87-page allegation, Signature had “full information” of the FTX scam since at least June 2020 and “considerably facilitated” the fraud by openly promoting the exchange and failing to “close, halt or otherwise limit” Alameda or FTX accounts that were in breach of terms of service. Signature substantially facilitated the fraud by failing to reveal this information. Signature, however, is yet to answer any query regarding the made acquisitions.
To claim damages for itself and other organizations that suffered losses “as a result of Signature’s malfeasance,” Statistica, which has its headquarters in the British Virgin Islands and was formally recognized as Statistica Fund Ltd., filed the case as a proposed class-action lawsuit. Statistica was formerly known as Statistica Fund Ltd.
