Temasek, Sequoia Capital, Softbank, leading VCs face lawsuit for “abetting” FTX fraud

Eighteen leading endeavor capital (VC) investment companies, including Temasek, Sequoia Capital, Sino Global and Softbank, have been called as offenders in a class-action lawsuit filed in the United States District Court for the Northern District of California for their links to the now-bankrupt crypto exchange FTX.The claim, submitted on Aug. 7, alleged that the financial investment firms were responsible for “abetting and assisting” the FTX scams. The suit declares that the accuseds used their “power, impact and deep pockets to launch FTXs house of cards to its multibillion-dollar scale.”A bit of Cabo vs. Temasek Holdings claim. Source: CourtListenerThe lawsuit mentions that the FTX cryptocurrency exchange breached numerous securities laws and stole consumers funds while the accused VCs offered an evasive photo of the exchange, declaring they had done their due diligence. Hence, these VC companies directly “committed, conspired to commit, and/or assisted and abetted the FTX Groups multi-billion-dollar scams for their own monetary and professional gain,” the claim claims.While talking about the role of VC companies in easing off and assisting FTX fraud, the plaintiffs mentioned the example of Temasek and its declaration regarding the monetary conditions of FTX. Temasek claims it performed an eight-month-long substantial review of FTXs financial resources, audits and regulatory checks, stating it discovered no warnings. The fit reads:”The Multinational VC Defendants also made various misleading and deceptive declarations of their own about FTXs business, finances, operations, and potential customers for the purpose of causing consumers to invest, trade, and/or deposit assets with FTX.”The fit further declared that these VC firms guaranteed the security and stability of FTX and promoted the exchanges purported attempts to become appropriately regulated.Temasek was among the early financiers in FTX with a $275 million financial investment. Nevertheless, after the collapse of the crypto exchange in November 2022, the investment firm wrote off its whole financial investment and even slashed compensation for the executives accountable for the FTX investment.Related: Prosecutors will still think about Sam Bankman-Frieds declared project financing scheme at trialTemasek, a Singapore state-backed investment firm, likewise puts the Singaporean federal government in the hot spot over its failure of oversight.The FTX collapse created a crypto contagion and cast a shadow of doubt on the entire crypto community resulting in a dry spell in institutional crypto investment for months.Magazine: Deposit danger: What do crypto exchanges truly do with your money?

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