• British Virgin Islands-based investment management and cryptocurrency trading firm Statistica Capital has filed a lawsuit against New York-based Signature Bank, alleging that the financial institution facilitated the fraudulent activities of crypto exchange FTX before its collapse.
• The class suit was filed at the US District Court for the Southern District of New York in Manhattan on Monday.
• Signature Bank had been aware of FTX’s fraudulent activities since June 2020.
Crypto Investment Firm Sues Signature Bank
British Virgin Islands-based investment management and cryptocurrency trading firm Statistica Capital has filed a lawsuit against New York-based Signature Bank, alleging that the financial institution facilitated the fraudulent activities of crypto exchange FTX before its collapse. The class suit was filed at the US District Court for the Southern District of New York in Manhattan on Monday.
Fraudulent Activities by FTX
The lawsuit alleges that Signature Bank had been aware of FTX’s fraudulent activities since June 2020. Recall that FTX went bankrupt in November 2022 after suffering a severe liquidity crunch. While the exchange is still in court trying to figure out how founder and former CEO Sam Bankman-Fried (SBF) mishandled users’ funds, Signature Bank announced that it will be pulling away from the crypto space. In December, the bank revealed that it was reducing its crypto-tied deposits by $8 billion to $10 billion, citing the 2022 bear market and FTX’s demise. Last month, CryptoPotato reported when crypto exchange Binance warned its users that Signature had set its SWIFT transfer limit to $100,000, further limiting its exposure to the digital asset space.
Signature Bank’s Alleged Role in Fraudulent Activity
The complaint alleged that Signature facilitated and played a significant role in facilitating frauds related to transactions on FFT Exchange platform prior to its bankruptcy filing by allowing customers to open accounts with false information or without adequate due diligence as well as allowing them access to funds held with FFT despite being aware of their involvement in suspicious activity or money laundering schemes. Furthermore, it is argued that this enabled customers who were involved with criminal activity related to FFT’s operations — such as embezzlement — access their assets even after they were frozen and unable to be recovered by other creditors through legal channels due to lack of jurisdiction outside United States law enforcement agencies’ authority over foreign entities operating outside U.S borders like FFT Exchange platform itself or those affiliated with it who were engaged in frauds related thereto prior to bankruptcy filing .
Signature’s Restrictions on Crypto Transactions
In an effort mitigate further risks associated with these activities and protect itself from potential legal ramifications resulting from future investigations into FFT Exchange Platform’s operations ,Signature bank had taken steps including imposing more stringent requirements for opening new accounts involving cryptocurrencies transactions as well lowering daily transaction limits for existing accounts engaged therein so as not expose themselves any further than necessary .
In summary ,Statistica Capital has accused signature bank of helping facilitate fraudulent transactions between customers affiliated with defunct cryptocurrency exchange FTX which resulted heavy losses incurred upon investors dealing through same platform per terms set forth within complaint document filed at US district court southern district located manhattan NYC earlier week while signature bank took action protect itself potential fallout future investigation into matter restricting opening new account involving cryptos well lowering daily transaction limits existing accounts engaging therein