Crypto investors sue Asian venture capital firms for ‘aiding and abetting’ FTX, naming Temasek, SoftBank and Sino Global
- The three Asian VC firms were named along with nine others, including Sequoia in the US, in a class-action lawsuit filed in California
- Each of the firms, which claimed to have conducted due diligence on FTX, ‘knew or was reckless in not knowing’ about the exchange’s issues, plaintiffs allege
Several high-profile venture capital (VC) firms in Asia, including Singapore’s Temasek Holdings, Japan’s SoftBank Group and Sino Global Capital in Hong Kong, are among defendants in a new class action lawsuit in the US for their roles in the collapse of FTX.
The VC firms, along with several of their subsidiaries, are accused of “aiding and abetting” and possibly “actively participating in the FTX Group’s massive multibillion-dollar global fraud”, in a complaint filed earlier this week to the United States District Court in the Northern District of California.
FTX’s “campaign to build public and investor trust” hinged on “significant financial and public support” from these VC firms, the plaintiffs argue.
As the VC firms claimed to have conducted proper due diligence on the crypto exchange, each of them “knew or was reckless in not knowing that SBF’s entire crypto empire was a sham”, the plaintiffs wrote, referring to FTX founder Sam Bankman-Fried.
Temasek, SoftBank and Sino Global are among 12 global VC companies named in the complaint, which also includes Sequoia Capital in the US.
“Without the multinational VC defendants, the largest financial fraud in US history would not have occurred,” plaintiffs alleged.
Temasek declined to comment. SoftBank and Sino Global did not respond to requests for comment.
