On January 10, a class action lawsuit was filed against Silvergate Capital, which is the parent corporation of Silvergate Bank and the operator of the Silvergate Exchange Network. The lawsuit was filed in the United States District Court for the Southern District of California.

Alleging that Silvergate violated the Securities Exchange Act of 1934, the lawsuit was filed on behalf of all purchasers of Silvergate securities between November 9, 2021, and January 5, 2023. The lawsuit was filed on January 5, 2021. of 2023.

In the lawsuit, the defendants included not only Silvergate’s CEO, Alan Lane, but also its chief financial officer, Antonio Martino.

The plaintiff in the lawsuit said that Silvergate’s technology failed to identify instances of money laundering in amounts greater than $425 million, resulting in the company being in a position where it was likely to face sanctions from the regulatory agencies.

In addition, the defendants knew that the public documents and statements that had been produced or distributed on behalf of the Company included materially inaccurate information and/or were misleading.

A tweet sent by Marcus Aurelius Research on November 15 serves as the basis for the allegation that the corporation was complicit in the movement of $425 million to money launderers in South America.

A large drop in Silvergate’s share price may have been caused, at least in part, by that tweet, as well as the Bear Cave newsletter post dated November 17 that referenced the same issue.

The share price fell further when it was revealed in a press release issued by Silvergate that the bank’s digital asset deposits had plunged 68 percent in the last quarter of 2022, from $11.9 billion to $3.8 billion.

The lawsuit contends that the class members may include at least hundreds or thousands of people, but their names have yet to be discovered. Silvergate shares are listed on the New York Stock Exchange. In recent months, Silvergate has come under increasing pressure.

On December 14, a class action lawsuit was filed against Silvergate for its claimed part in transferring money from FTX user accounts to Alameda Research.