Three VC firms have reportedly been taken to court by FTX investors who claimed their marketing efforts added an “air of legitimacy” to FTX.
The three firms were all investors in FTX’s $900 million Series B round in July 2021, the largest raise in crypto history, in which various partners of the firms spoke highly of former FTX CEO, Sam Bankman-Fried.following the funding announcement in July 2021, Paradigm’s co-founder Matt Huang called Bankman-Fried a “special” founder who is “stunningly ambitious.”
Speaking to Cointelegraph, crypto lawyer Liam Hennessy, partner at Australian law firm Gadens, stated that it is a “tricky case,” and he questions “what obligation Sequoia and others” have to “completely separate investors.” He added that despite the fact Sequoia’s due diligence wasn’t great, it doesn’t make it “liable to others.”
Hennessy believed it could be a case of “buyer beware” – as there is no suggestion that Sequoia wasn’t “playing within the regulatory rules.” Cointelegraph contacted Sequoia Capital, Thoma Bravo and Paradigm for comment but did not receive an immediate response.
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