JPMorgan Sued Over Alleged Crypto Liquidity Pool Fraud Scheme
JPMorgan Chase has been sued by an investor in connection with an alleged $328 million cryptocurrency fraud scheme.
The lawsuit claims that JPMorgan failed to detect and stop suspicious activity carried out by one of its customers, Goliath Ventures, which used the bank's services while allegedly operating a fraudulent investment program tied to decentralized finance (DeFi) liquidity pools.
Federal prosecutors recently charged Goliath Ventures' chief executive, Christopher Alexander Delgado, with wire fraud and money laundering. According to investigators, Delgado promoted investment opportunities that promised unusually high monthly returns by claiming customer funds would be deployed in crypto liquidity pools.
However, the U.S. Department of Justice alleges that most investor funds were never placed into liquidity pools as advertised. Instead, prosecutors claim the money was diverted for personal spending and to pay earlier investors.