New revelations indicate that there were some close links between Sam Bankman-Fried, the disgraced founder of collapsed cryptocurrency exchange FTX, and some of his key backers.
according to a new report good Bankman-Fried invests $20 million in late 2021 in a fund managed by crypto venture capital firm Paradigm, reported by the Financial Times. The same fund later invested in the FTX and FTX US exchanges.
“It’s weird,” Cornell Law School professor Charles Whitehead reportedly said in a comment. He added that although there was “nothing wrong” with such an arrangement, “it does raise your eyebrows”.
Founded in 2018, Paradigm is a leading venture capital firm investing in the cryptocurrency, financial services, information technology, media, telecommunications, SaaS and Web3 sectors.
A spokesperson for the San Francisco-based company reportedly claimed that the VC disclosed a general conflict of interest to investors in Paradigm One by stating that the fund could invest in companies run by its limited partners.
In addition to Paradigm, there are other examples of SBF investing in specific funds that supported its FTX businesses.
For example, the disgraced crypto boss invested $5 million in a fund launched by UVM, a branch of Singaporean bank United Overseas Bank, and Signum Capital through his trading firm Alameda. The fund later invested in FTX, the FT reported.
in december, it was revealed That SBF invested hundreds of millions of dollars in VC funds run by firms such as Sequoia Capital, which also backed FTX. Almeida also had smaller investments in funds run by FTX venture capital backers Paradigm, Altimeter Capital Management, Sino Global Capital, and Multicoin Capital.
As mentioned, Bankman-Fried was arrested Last December, US prosecutors in the Bahamas formally filed criminal charges against him. He was eventually extradited to the US where he was later released from prison. posting a $250m bond in a New York court.
The Southern District of New York indicted SBF on eight criminal charges, including conspiracy to commit wire fraud and misappropriation of customer funds. Separately, the SEC has accused SBF of “scheming to defraud equity investors in FTX”.
Following the collapse of FTX, Paradigm co-founder Matt Huang took to Twitter to explain the exchange’s impact on crypto VCs. “We are shocked by the revelations about FTX, Alameda and SBF,” he said at the time, adding that investments in FTX are a small part of his net worth and have been written down to zero.
Bitcoin Crypto Related Post