JPMorgan Sued Over Alleged Role in $328M Crypto Liquidity Pool Scam
JPMorgan Chase is facing a lawsuit over its alleged role in a $328 million cryptocurrency fraud scheme. The complaint, filed in federal court in San Francisco, accuses the bank of failing to detect and stop suspicious activity carried out by one of its customers, Goliath Ventures.
The victim claims that JPMorgan should have identified warning signs associated with Goliath Ventures' activities and conducted adequate due diligence under Know Your Customer (KYC) procedures. The company allegedly promoted investment opportunities promising unusually high monthly returns through decentralized finance (DeFi) liquidity pools, but most investor funds were never placed into these pools as advertised.
Instead, prosecutors claim the money was diverted for personal spending, including luxury travel and property purchases, while some funds were used to pay earlier investors. The scheme ultimately raised hundreds of millions of dollars from investors.