JPMorgan Sued Over Alleged $328M Crypto Liquidity Pool Fraud Scheme

JPMorgan Chase is facing a lawsuit over allegations it failed to detect and stop a $328 million cryptocurrency fraud scheme. The complaint, filed in federal court in San Francisco, accuses the bank of allowing Goliath Ventures to use its banking services despite allegedly operating a fraudulent investment program tied to decentralized finance (DeFi) liquidity pools.

The case involves Christopher Alexander Delgado, CEO of Goliath Ventures, who was recently charged with wire fraud and money laundering. Authorities claim that investors were promised unusually high monthly returns by being placed in crypto liquidity pools, but most funds were diverted for personal spending or used to pay earlier investors.

The plaintiff argues that JPMorgan should have identified warning signs associated with Goliath Ventures' activities and verified whether the company was properly registered with financial regulators. The bank declined to comment on the lawsuit.