JPMorgan Chase has been named in a lawsuit connected to an alleged $328 million cryptocurrency fraud scheme, with a victim claiming the bank failed to detect and stop suspicious activity carried out by one of its customers. The complaint, filed this week in federal court in San Francisco, accuses the largest U.S. bank of allowing a company called Goliath Ventures to use its banking services while allegedly operating a fraudulent investment program tied to decentralized finance (DeFi) liquidity pools.
Federal prosecutors recently charged the firm’s chief executive, Christopher Alexander Delgado, with wire fraud and money laundering.
Delgado, a Florida resident, was arrested last month in connection with the case.
Alleged Liquidity Pool Scheme
According to investigators, Delgado promoted investment opportunities that promised unusually high monthly returns by claiming customer funds would be deployed in crypto liquidity pools, automated pools of digital assets commonly used in DeFi trading platforms to facilitate token swaps and generate yield.
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, including luxury travel, property purchases, and entertainment expenses, while some funds were used to pay earlier investors in order to sustain the operation.
Authorities say the scheme ultimately raised hundreds of millions of dollars from investors.
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Bank Accused Of Failing To Intervene
One of the investors who lost money in the alleged scheme is now seeking damages from JPMorgan, arguing that the bank should have identified warning signs associated with Goliath Ventures’ activities.
The lawsuit contends that because the company publicly described itself as operating crypto liquidity pools, JPMorgan should have verified whether the business was properly registered with financial regulators such as the Commodity Futures Trading Commission.
The complaint further alleges that the bank failed to conduct adequate due diligence under standard Know Your Customer (KYC) procedures before maintaining the company’s accounts.
JPMorgan declined to comment on the lawsuit.
The filing also references public remarks from JPMorgan CEO Jamie Dimon, who has repeatedly criticized cryptocurrency markets and previously described Bitcoin as resembling a decentralized Ponzi scheme.
The case adds to a growing list of legal disputes examining whether financial institutions should bear responsibility when fraudulent crypto investment schemes move funds through traditional banking channels.
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