Key Takeaways
- Deadline Approaching: Investors who deposited fiat into FTX or Alameda accounts between 2019-2022 must file a claim or opt out by January 30, 2024.
- Significant Settlement: A $10 million class-action settlement has been preliminarily approved, offering additional recovery beyond the FTX bankruptcy proceedings.
- Broad Eligibility: Over 46,000 potential claimants have been identified, with a final hearing for settlement approval scheduled for February 9, 2024.
- Legal Context: The lawsuit alleges Silvergate Bank aided FTX and Alameda's misconduct. The bank wound down operations in 2023.
Final Call for FTX and Alameda Investors in $10 Million Silvergate Settlement
Time is running out for thousands of claimants affected by the collapse of the FTX cryptocurrency exchange. A major class-action lawsuit against the now-defunct Silvergate Bank has reached a critical phase, with a court-approved $10 million settlement on the table. Investors with ties to FTX or its sister trading firm, Alameda Research, have a limited window to act.
Who is Eligible and What's at Stake?
The settlement stems from a lawsuit filed in the U.S. District Court for the Southern District of California. It specifically targets the role of Silvergate Bank, which was a primary banking partner for FTX and Alameda. The legal action alleges that Silvergate, its holding company, and former CEO Alan J. Lane "aided and abetted tortious conduct" by FTX, Alameda, and Sam Bankman-Fried.
Eligibility extends to users who deposited U.S. dollars or other fiat currency "into an FTX- or Alameda-related account" between 2019 and 2022. This group represents a significant portion of the victims from the multi-billion-dollar exchange collapse.
“The Settlement is fair, reasonable, and adequate [...] It marks a significant recovery from the bankrupt Silvergate and will provide additional relief, beyond that obtained in the FTX Bankruptcy, for those affected,” stated a December 8 court filing seeking final approval.
Critical Deadlines and Next Steps
The legal process has set clear milestones for affected parties:
- Claim or Opt-Out Deadline: January 30, 2024. Eligible investors must submit a claim form to receive a potential payout or formally opt out to preserve their right to sue independently.
- Final Fairness Hearing: February 9, 2024. Judge Ruth Bermudez Montenegro will hold a hearing to consider final approval of the settlement terms.
Court documents indicate that over 46,000 potential claimants have been identified through the FTX bankruptcy case. Payouts from the $10 million fund will be distributed proportionally based on validated claims.
Silvergate's Role and the Ongoing Legal Fallout
Silvergate Bank was a cornerstone of the crypto banking ecosystem and a critical financial conduit for FTX. Its voluntary liquidation in March 2023 followed the exchange's November 2022 collapse. While criminal cases against key FTX and Alameda executives like Sam Bankman-Fried and Caroline Ellison have concluded, civil lawsuits like this one continue to work through the courts.
The aftermath also includes ongoing proceedings against other figures, such as Michelle Bond, the wife of former FTX executive Ryan Salame, who faces campaign finance charges in a separate New York case.
This settlement represents a crucial opportunity for creditors to seek further compensation. Affected parties are urged to review the official settlement website and legal notices immediately to understand their rights and options before the fast-approaching deadline.
