Signature Bank Sued for 'Substantially Facilitating' FTX Comingling

Signature "knew of and permitted the commingling of FTX customer funds within its proprietary, blockchain-based payments network, Signet," according to a court filing.

AccessTimeIconFeb 7, 2023 at 11:41 a.m. UTC
Updated May 9, 2023 at 4:07 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

Crypto-friendly bank Signature Bank (SBNY) faces a putative class-action lawsuit for its involvement in the operations of the now-failed cryptocurrency exchange FTX.

Statistica Capital, an algorithmic trading firm, and Statistica Ltd. claim the bank "had actual knowledge of and substantially facilitated the now-infamous FTX fraud," according to a filing in the U.S. District Court for the Southern District of New York dated Feb. 6. "In particular, Signature knew of and permitted the commingling of FTX customer funds within its proprietary, blockchain-based payments network, Signet."

  • What's Next for FIT21?
    07:15
    What's Next for FIT21?
  • U.S. House Approves Crypto FIT21 Bill; Sam Bankman-Fried Being Moved to New Prison
    01:52
    U.S. House Approves Crypto FIT21 Bill; Sam Bankman-Fried Being Moved to New Prison
  • Ether Sees Strongest Bull Momentum in 3 Years
    01:08
    Ether Sees Strongest Bull Momentum in 3 Years
  • SEC Chair Gensler Got the FIT21 Bill 'Wrong': Rep. French Hill
    00:59
    SEC Chair Gensler Got the FIT21 Bill 'Wrong': Rep. French Hill
  • Statistica says it advised Signature the funds were meant for FTX, but the bank allowed it to be transferred to accounts controlled by Alameda Research, the trading firm owned by FTX founder Sam Bankman-Fried.

    It was the revelation of the blurry lines between FTX and its supposedly separate sister firm Alameda that brought about FTX's swift downfall, having first been exposed by CoinDesk in early November.

    FTX was one of the bank’s clients, although the crypto exchange’s deposits with Signature amounted to less than 0.1% of the bank’s overall deposits. Previously regarded as one of the Wall Street's most crypto-friendly banks, it remains to be seen whether its appetite for cryptocurrency will be soured as a result of FTX's collapse.

    Signature's Nasdaq-listed shares were down less than 1% in pre-market trading.

    The firm did not immediately respond to CoinDesk's request for comment.

    Statistica Capital is a British Virgin Islands-licensed company offering algorithmic trading focusing on automated strategies across different trading platforms, according to its website.



    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Jamie Crawley

    Jamie Crawley is a CoinDesk news reporter based in London.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.