- The defendants include companies such as Temasek, Sequoia Capital and Softbank.
- They are accused of luring investors into a deliberately unstable business, resulting in financial losses.
- This is not the first such lawsuit. Earlier, the stock exchange promoters were accused of the same.
A class action lawsuit has been filed in the U.S. District Court of California against 18 venture capital firms, including Temasek, Sequoia Capital and Softbank. It alleges that the firms are “accomplices” in the FTX fraud scheme.
The complaint accuses the defendants of creating an “illusion of security” for the exchange. Temasek’s audit of the platform is cited as an example.
Remember, the firm said it found nothing suspicious about the platform’s activities as a result of the audit. The company wrote off investments “stuck” in FTX, then fined itself.
“The multimillion-dollar international defendants made numerous misleading statements about FTX’s business, finances, operations and prospects in order to induce their customers to invest, trade or place funds on the platform,” the lawsuit says.
Notably, this is not the first such litigation. In February, FTX investors filed a class action lawsuit against Sequoia Capital, Paradigm and Thoma Bravo.
In March, former users of the exchange accused the company’s already promoters of creating an “illusion of sustainability” for the platform. They were demanded $1 billion. Note another class action lawsuit was filed on August 7, 2023, this time against the law firm Fenwick & West LLP. It alleges that the firm is an accomplice in a scheme to embezzle FTX client funds.
The firm is also alleged to be an accomplice in a scheme to embezzle FTX client funds.