British Virgin Islands-based cryptocurrency trading and investment management company Statistica Capital has filed a lawsuit against New York-based Signature Bank, alleging that the financial institution facilitated the fraudulent activities of cryptocurrency exchange FTX prior to its collapse.
According to a Bloomberg report, the class action lawsuit was filed Monday in the US District Court for the Southern District of New York in Manhattan. The complaint alleges that Signature facilitated and played a significant role in the FTX fraud.
Alleged role of Signature in the FTX fraud
Remember that FTX went bankrupt in November 2022 after suffering a severe liquidity crisis. While the exchange is still in court trying to find out how founder and former CEO Sam Bankman-Fried (SBF) mishandled user funds, Signature Bank announced that it is moving away from the crypto space.
In December, the bank revealed that it was reducing its cryptocurrency-linked deposits by $8 billion to $10 billion, citing the 2022 bear market and the demise of FTX.
Last month, CryptoPotato reported when cryptocurrency exchange Binance warned its users that Signature had set its SWIFT transfer limit at $100,000, further limiting its exposure to the digital asset space.
While Signature is continually walking away from the industry, its role in the collapse of FTX has not gone unnoticed. Statistica accused the bank of allowing the troubled exchange to combine user accounts with its blockchain network.
Signature failed to report to the proper authorities even though it noted suspicious FTX transactions through its Signet blockchain payment network.
The complaint alleged that the New York-based bank had been aware of FTX’s fraudulent activities since June 2020. However, Signature allegedly facilitated the fraud by promoting the exchange to the public and not suspending Alameda or FTX accounts.
Statistica filed the suit as a proposed class action to allow it and other affected entities to recover damages for the collapse of FTX due to Signature’s misconduct.
FTX moves to recover donations to politicians
Meanwhile, FTX’s new administrators are trying to recoup funds donated to politicians during SBF’s time as CEO. The exchange founder and his henchmen reportedly donated around $93 million to the said parties.
The cryptocurrency company has sent confidential messages to the beneficiaries, seeking the return of donations before February 28.
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This post Crypto Investment Firm Sues Signature Bank For Facilitating Fraudulent FTX Transfers: Report
was published first on https://cryptopotato.com/crypto-investment-firm-sues-signature-bank-for-facilitating-ftx-fraudulent-transfers-report/
