JPMorgan Sued Over Alleged Crypto Liquidity Pool Fraud Scheme

JPMorgan Chase is facing a lawsuit over its alleged involvement in a $328 million cryptocurrency fraud scheme.

The complaint, filed in federal court in San Francisco, accuses JPMorgan of failing to detect and stop suspicious activity carried out by one of its customers, Goliath Ventures.

Goliath Ventures' CEO, Christopher Alexander Delgado, was recently charged with wire fraud and money laundering for promoting investment opportunities that promised unusually high monthly returns through decentralized finance (DeFi) liquidity pools.

However, investigators claim most investor funds were never placed into liquidity pools as advertised, but instead diverted for personal spending or used to pay earlier investors to sustain the operation.

The lawsuit contends JPMorgan should have identified warning signs associated with Goliath Ventures' activities and conducted adequate due diligence under Know Your Customer (KYC) procedures before maintaining the company's accounts.