Crypto-friendly bank Signature accused of turning a blind eye to FTX fraud, had prior knowledge

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Signature Bank Accused of Overlooking FTX Fraud

According to a report by Bloomberg, the crypto-friendly bank Signature Bank is being accused by investment firm Statistica Capital Ltd. of allowing FTX to commingle customer accounts with its blockchain network, leading to the collapse of FTX.

In a lawsuit filed on Monday in Manhattan federal court, Statistica Capital Ltd. stated that despite Signature observing suspicious FTX transfer activities through its Signet blockchain payment network, it still permitted the behavior.

Furthermore, the complaint also mentioned that Signature had actual knowledge of FTX's fraudulent activities at least since June 2020, but instead of closing, suspending, or limiting the accounts of Alameda and FTX that violated terms of service, Signature publicly promoted FTX to facilitate the fraud.

Signature Bank Faces Consequences

As reported earlier, Signature Bank has also been impacted by the collapse of FTX, borrowing nearly $10 billion from the Federal Home Loan Bank (FHLB) in the fourth quarter of last year. Additionally, it announced that starting from February 1st, it will no longer support transactions below $100,000 for exchange clients.