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Matt Huang claimed that he had been under the impression that Alameda Research was not receiving any special treatment from FTX.
According to Matthew Huang, the co-founder and managing partner of the crypto investment firm Paradigm, Sam “SBF” Bankman-Fried was strongly opposed to the idea of allowing investors to join the board of directors at FTX. This stance has raised eyebrows, especially among Paradigm and various venture capital firms like Sequoia, Temasek, and BlackRock, who all suffered losses due to their investments in the now-bankrupt crypto exchange. In response, they have faced scrutiny and subsequently issued statements regarding their involvement with FTX.
During his testimony in a New York Federal Court on the third day of Bankman-Fried’s trial, Huang asserted that Bankman-Fried believed that having investors on FTX’s board of directors would not bring significant benefits. FTX’s board reportedly consisted of only three individuals: Bankman-Fried himself, an unnamed lawyer from Antigua and Barbuda (the same country where FTX was incorporated), and Jonathan Cheesman, a former FTX executive who resigned from the board in June.
Huang engaged in several conversations with Bankman-Fried before Paradigm’s $125-million investment in the exchange’s remarkable $900-million Series B funding round, which closed in July 2021. Huang conceded that he had not conducted adequate due diligence and had relied too heavily on information provided by Bankman-Fried.
Despite concerns about the lack of formal structure at FTX and its potential ties to its sister hedge fund, Alameda Research, Huang explained that investors were enticed by FTX’s rapid expansion in the crypto industry. However, he also noted that he and other Paradigm investors were worried that Bankman-Fried might have been dedicating more time to Alameda instead of FTX, potentially at the expense of Paradigm’s investment.
Furthermore, Huang expressed concerns about the possibility of Alameda receiving preferential treatment from FTX, and he feared the potential damage to the company’s reputation if these concerns were valid. Bankman-Fried had assured Huang that Alameda was not being given any special treatment by FTX. However, on the same day, FTX co-founder Gary Wang testified that Alameda had been granted access to a nearly unlimited flow of capital from the exchange.
In addition, Huang claimed that he had no knowledge of any alleged mingling of funds between FTX and Alameda Research. When questioned by the prosecution, Huang was asked whether his decision to invest in FTX would have been different if he had been informed that the exchange allegedly used customer deposits for investment purposes.
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SBF showed investors on the FTX board “extreme resistance”: Co-founder of Paradigm

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