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Civil Litigation

Feb. 16, 2023

Venture capital firms sued over support of FTX

The proposed class complaint alleges Sequoia Capital, Thoma Bravo and Paradigm were the biggest backers of FTX and knew FTX would use their investment on false and misleading promotional activities. Plaintiffs also accuse the venture capitalists of making misleading statements of their own to drive users to the FTX platform and thus increase the value of their investments.

The first lawsuit against venture capital firms that supported the former cryptocurrency exchange and hedge fund FTX Trading Ltd. was filed in federal court in San Francisco.

Tuesday's proposed class complaint alleges Sequoia Capital Operations LLC, Thoma Bravo LP and Paradigm Operations LP were the biggest backers of FTX and knew FTX would use their investment on false and misleading promotional activities. Plaintiffs also accuse the ventu...

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