FTX Empire VC Ties Under Investigation

Court documents showed that Sam Bankman-Fried, the co-founder and former CEO of FTX, put more than $20 million into a venture capital firm called Paradigm. Paradigm then bought a stake in FTX.

Recent Released: WazirX Shows Reserves, Shiba Inu (SHIB) Largest Holding

As the court case of a once-crypto billionaire goes on, different pieces of information are being made public. In the bankruptcy filing from this week, it said that Bankman-Fried had put $2.5 billion into a fund managed by Paradigm. Paradigm One then put that money into FTX and its US exchanges.

Paradigm says

Paradigm says that Bankman-Fried was treated the same as the other investors in its fund. It was started in 2018 by Matt Huang, who used to work at Sequoia Capital, and Fred Ehrsam, who helped start Coinbase.

San Francisco-based Paradigm said

A spokesman for San Francisco-based Paradigm said that investors in Paradigm One were also told about large conflicts of interest, such as the possibility that the fund would invest in businesses run by its limited partners.

The link between Paradigm and FTX

Paradigm was one of the big investors, and in July 2021, they helped the FTX team with their Series B fundraising. Later that year, in November, Paradigm One was released, and Alameda Research had a 20 million USD stake in it. Later, they added $5 million more to it by buying it from another investor in the company. It started funding FTX in February 2022, and the company was worth $40 billion USD with its U.S. branch included.

See also  The Fall Short OF Chicago Fire Montreal CF 2022

When FTX filed for bankruptcy on November 11, 2022, the company wrote off its 278 million USD investment in the company. Huang, who helped start the company, later said he regretted putting money into Bankman-empire. Fried’s

The Investment of Bankman-Fried Fiasco

Sam Bankman-Fried put millions of dollars into UVM Signum and Sequoia Capital, as well as other venture capital firms. They gave FTX a lot of help. A report from Financial Times says that Alameda Research, which is FTX’s sister company, put more than $200 million into funds run by Sequoia.

He is accused of scamming those investors and using the money from FTX clients to support his Alameda Research hedge fund, which mostly invested in risky start-ups and crypto tokens. He lied about the money to get people to buy into the scheme.

Source: Google Trend

By Vil Joe

A writer and editor based out of San Francisco, Vil has worked for The Wirecutter, PCWorld, MaximumPC and TechHive. Her work has also appeared on InfoWorld, MacWorld, Details, Apartment Therapy and Broke-Ass Stuart. In her spare time, she takes too many pictures of her cats, watches too much CSI and obsesses over her bullet journal.

Leave a Reply

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