Due to their connections to the now-defunct cryptocurrency exchange FTX, a lawsuit has been filed against a number of large venture capital (VC) investment firms.
The case claims that the investment companies were "aiding and abetting" the FTX fraud
Due to their connections to the now-defunct cryptocurrency exchange FTX, a lawsuit has been filed against a number of large venture capital (VC) investment firms in the Northern District of California.
The case, which was submitted on August 7, claims that the investment companies were "aiding and abetting" the FTX fraud.
In the lawsuit, the defendants are accused of using their "power, influence, and deep pockets to launch FTX's house of cards to its multibillion-dollar scale."
The lawsuit alleges that the defendant VCs provided an unreliable representation of the exchange and claimed they had done their due diligence, while FTX broke various securities laws and stole money from clients.
The list of VC firms listed as defendants include: Sequoia Capital, Thoma Bravo, Paradigm, SkyBridge, Multicoin Capital, Tiger Global Management, Ribbit Capital, Altimeter, K5 Global, Sino Global, Softbank Group and Temasek.
Temasek contributed $275 million to FTX, making it one of the company's first investors. The investment firm, however, wrote off its entire investment once the crypto exchange failed in November 2022 and even reduced bonuses for the executives in charge of the FTX venture.