Was SBF paying VC funds in order for them to invest later in FTX ?
New revelations could explain why so many Venture Capitalists invested in FTX in the two years before its collapse, without proper due diligence. According to a report by the Financial Times, Sam Bankman-Fried has on multiple occasions invested millions, through sister-trading firm Alameda Research, in VC firms such as Paradigm or Sequoia Capital. Those funds later invested in FTX.
Reuters reported last week that the SEC was looking into investors’ due diligence processes. Multiple revelations over the last two months have suggested mismanagement and a lack of compliance and oversight in the exchange.
Sam Bankman-Fried himself admitted to it in several interviews he made before his arrest on Dec. 12 in the Bahamas. Apart from the criminal charges he is facing from the Southern District of New York, SBF has also been charged by the Securities and Exchange Commission for “orchestrating a scheme to defraud equity investors”.
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