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Signature Bank accused of facilitating FTX crypto exchange collapse

Investors Take Legal Action Against Signature Bank for Lying About Crypto Exposure

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TL;DR

  • Statistica Capital Ltd recently took legal action against Signature Bank.
  • The class-action lawsuit is for the investment firm to recover losses for itself and other entities impacted by Signature Bank’s misconduct.

An investment firm recently took legal action against Signature Bank, claiming that it facilitated the FTX collapse by permitting the bankrupt crypto exchange to merge customer accounts with its blockchain network.

Despite observing suspicious FTX transfers through its Signet blockchain payment system, Signature still allowed these payments to go ahead. However, this was revealed in a legal complaint filed on Monday by Statistica Capital Ltd. in the Manhattan federal court.

In December, the bank declared that it would eliminate up to $10 billion worth of deposits from digital asset customers due to its retreat from the cryptocurrency sector after FTX’s breakdown. Deposits created by FTX only accounted for just a fraction (less than one percent) of the bank’s total deposits as per their November 14 report.

Signature was allegedly aware of the FTX fraud since June 2020 and is being accused of intensifying this illicit activity by publicizing the exchange and not taking actions to “close, suspend or otherwise limit” any Alameda or FTX accounts that breached terms of service.

Statistica, an investment firm based in the British Virgin Islands and formerly known as Statistica Fund Ltd., has initiated a class-action lawsuit to recover losses for itself and other entities impacted by Signature Bank’s misconduct. The suit is filed under 23-cv-00993 at the US District Court, Southern District of New York (Manhattan).

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Damilola Lawrence

Damilola is a crypto enthusiast, content writer, and journalist. When he is not writing, he spends most of his time reading and keeping tabs on exciting projects in the blockchain space. He also studies the ramifications of Web3 and blockchain development to have a stake in the future economy.

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