Several well-known venture capital firms in Asia, including Singapore’s Temasek Holdings, Japan’s SoftBank Group, and Sino Global Capital in Hong Kong (China), are facing a class-action lawsuit in the US. with allegations of aiding and abetting FTX.
According to SCMP ‘s public and investor confidence-building campaign, the lawsuit argues that FTX is based on financial support from these venture capital firms. The plaintiffs said that without the involvement of the other companies, the largest financial fraud in American history would never have happened.
According to the complaint, FTX and its founder Sam Bankman-Fried engaged in market manipulation, insider trading, and deceptive practices to inflate the price of FTX’s native tokens, and defraud investors of millions. USD. Audit firms Prager Metis and Armanino, along with four former FTX executives, are also named as defendants in the lawsuit
Following the collapse of FTX in November 2022, Bankman-Fried was charged with fraud, money laundering, and conspiracy to commit fraud. The US Securities and Exchange Commission (SEC) accused him of defrauding investors and using the proceeds to buy real estate for himself and his family.
In another class action lawsuit filed in January 2023, US venture capital firms Sequoia Capital, Paradigm, and Thoma Bravo are accused of enticing users to invest in FTX.
An official of the Trading Commission Corresponding Goods The American Exchange (CFTC) said that the failure of FTX raised questions about the role of venture capital firms, which failed to consider and recognize the risks surrounding the exchange
Venture capital funds that once “poured” billions of dollars into FTX are now facing huge losses. Temasek said it had misplaced trust, Temasek had invested $210 million in FTX International and $65 million in FTX US. In May 2023, Temasek announced a cut in compensation for the exchange’s investment recommendation team and senior management team. In early July, Sino Global filed a claim against FTX Trading for $67.3 million, the two companies have jointly established an investment fund with the aim of raising up to $200 million by 2021.
