Sequoia Capital, Paradigm, Thoma Bravo Accused of Promoting the Legitimacy of FTX (Report)

By akohad Feb16,2023


Leading venture capital firms such as Sequoia Capital, Thoma Bravo, and Paradigm were reportedly indicted for adding an “air of legitimacy” to the bankrupt cryptocurrency exchange FTX.

Sam Bankman-Fried, accused of committing several crimes such as fraud and money laundering, received a subpoena as part of the case against the organizations he found and will have to present a range of documents on February 17. His father – Joseph Bankman – and Alameda Research’s former bosses – Caroline Ellison and Gary Wang – will do so a day earlier.

The FTX Drama Goes on

According to a Bloomberg coverage, Sequoia Capital and the other private equity firms were accused in a lawsuit of popularizing FTX in a marketing campaign in 2021. Recall that the crypto platform collapsed in November last year, causing multi-billion investor losses and massive reputational damage to the digital asset sector.

“As a result of defendants’ significant investments in the FTX entities, each was incentivized to leverage their professional reputations and media outreach capabilities to portray FTX as a trustworthy and legitimate crypto exchange,” the complaint reads.

Sequoia Capital, Thoma Bravo, and Paradigm were among the numerous companies that parted with a significant amount of funds due to their exposure to the bankrupt trading venue. Sequoia lost over $200 million, while its team said not all investments are successful:

“We are in the business of taking risks. Some investments will surprise to the upside, and some will surprise to the downside.”

Despite the financial loss, Sequoia assured its bad experience with FTX has not negatively impacted its fund. 

Paradigm – a crypto and Web3-focused venture capital firm – lost more than $270 million following the platform’s demise. Co-Founder Matt Huang said he feels “shocked” by the event, adding it will prompt companies to investigate more before allocating funds to projects.

The US-based Thoma Bravo parted with over $100 million. 

SBF to Visit Court This Week

Another report revealed that the former CEO will go to court on February 17 to provide necessary documents as part of the case against his trading venue. He currently lives at his parents’ house after a New York federal judge released him under a $250 million bond.

SBF faces several criminal accusations, including wire fraud and money laundering. He could spend his life behind bars if convicted during the October trial.

His father – Joseph Bankman, FTX’s former Director of Engineering – Nishad Singh, and the ex-bosses of Alameda Research – Caroline Ellison and Gary Wang – will present an array of documents tomorrow (February 16). 

Unlike SBF, Ellison and Wang pleaded guilty to committing fraud that eventually led to the crash of FTX.


Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).

PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to receive up to $7,000 on your deposits.


Source link

By akohad

Related Post

Leave a Reply

Your email address will not be published. Required fields are marked *