The Texas-based Word of God Church has filed a non-conformed lawsuit in San Diego County against Silvergate Bank, a now liquidated San Diego-based cryptocurrency bank, for using $25 million of the church’s deposits to participate in a crypto-currency scheme with Sam Bankman-Fried’s defunct FTX Trading.
The church claims that Silvergate and its CEO, Alan Lane, had knowledge of the alleged fraud and corporate misconduct, yet still funneled funds to FTX. Therefore, the church demands the return of their money and damages for the alleged wrongdoing.
According to the lawsuit, FTX Trading experienced a rapid rise in value, from a small cryptocurrency exchange to a platform worth 32 billion dollars within a few years. During this time, Silvergate’s relationship with Bankman-Fried’s company and his associated hedge fund, Alameda Research, flourished. Apparently, Silvergate moved at least $8 billion in FTX customer funds into Alameda’s accounts.
The church deposited $25 million into its FTX account in September of last year, but two months later, FTX declared bankruptcy and their money disappeared. Silvergate refused to return the church’s deposit, and in December, Bankman-Fried was arrested and two of his top associates pleaded guilty to criminal charges.
Now, as the aftermath continues and Silvergate has announced its closure, the Word of God Church seeks to reclaim their money and seek justice. The lawsuit has been submitted to the San Diego Superior Court and will now proceed.
