Silvergate Bank, once known as a cryptocurrency-friendly bank, has prepared up to $10 million (approximately 147.7 billion won) in damages for a class-action lawsuit, officially launching the compensation process for users of accounts related to FTX and Alameda Research.
On Monday, local time, according to a lawsuit filed in the Southern District of California, Silvergate users who deposited fiat currency into accounts related to FTX or Alameda Research between 2019 and 2022 must opt out of the class-action lawsuit or file a claim for damages by January 30th of next year. This is part of a civil settlement agreement against Silvergate Bank, its holding company Silvergate Capital, and former CEO Alan J. Lane for allegedly aiding and abetting illegal activities by FTX, Alameda, and Sam Bankman-Fried.
Court documents show that this settlement was conducted independently of Silvergate's bankruptcy proceedings, and its significance lies in providing "additional avenues of recovery" for investors harmed by FTX's bankruptcy. Court documents filed on December 8th of last year emphasized that "this settlement is fair, reasonable, and appropriate," and that "it is the result of recovering a substantial portion of recoverable assets from the bankrupt Silvergate and provides additional relief to victims of the FTX crisis who suffered billions of dollars in losses."
Silvergate Bank rose rapidly through its partnerships with major cryptocurrency exchanges, but suffered a liquidity crisis after the FTX crash last year, ultimately entering liquidation proceedings in March 2023. At the time, Silvergate was heavily criticized for failing to effectively block the flow of funds related to FTX, and this lawsuit is a continuation of that criticism. In particular, whether Silvergate participated in any form of FTX's improper misappropriation of customer deposits has become a focal point of the dispute.
With the court's final approval, detailed information regarding eligibility criteria and payment methods for this class-action lawsuit is expected to be released. This lawsuit is attracting attention as it may set a precedent for pursuing legal action against FTX and related financial institutions.
🔎 Market Analysis
The move to hold financial institutions responsible for the FTX chain of bankruptcies a reality suggests that cryptocurrency infrastructure companies may also face the spread of regulatory risks.
💡 Key Strategies
If you have previously used financial services associated with centralized exchanges, you should closely monitor related litigation and compensation proceedings. With the trend towards strengthened investor protection, more similar cases may emerge.
📘 Terminology Explanation
Class action lawsuit: A lawsuit brought jointly by multiple victims. The judgment or settlement applies to all members.
Settlement payment: In the course of a legal dispute, the compensation paid by the defendant to the plaintiff signifies that the dispute has been settled through an agreement between the parties before a court judgment.
TP AI Precautions
This article uses the TokenPost.ai basic language model for article summarization. There may be omissions of key content or inaccuracies.
