Temasek, Sequoia Capital, Softbank, leading VCs face lawsuit for “abetting” FTX fraud
Eighteen leading venture capital (VC) investment firms, including Temasek, Sequoia Capital, Sino Global and Softbank, have been named as defendants in a class-action lawsuit filed in the United States District Court for the Northern District of California for their links to the now-bankrupt crypto exchange FTX.
The lawsuit, filed on Aug.7, alleged that the investment firms were responsible for “aiding and abetting” the FTX fraud. The suit claims that the defendants used their “power, influence and deep pockets to launch FTX’s house of cards to its multibillion-dollar scale.”
The lawsuit states that the FTX cryptocurrency exchange violated several securities laws and stole customers’ funds while the defendant VCs offered an elusive picture of the exchange, claiming they had done their due diligence. Thus, these VC firms directly “perpetrated, conspired to perpetrate, and/or aided and abetted the FTX Group’s multi-billion-dollar frauds for their own financial and professional gain,” the lawsuit claims.
While discussing the role of VC firms in aiding and abating FTX fraud, the plaintiffs cited the example of Temasek and its statement regarding the financial conditions of FTX. Temasek claims it conducted an eight-month-long extensive review of FTX’s finances, audits and regulatory checks, saying it found no red flags. The suit reads:
“The Multinational VC Defendants also made numerous deceptive and misleading statements of their own about FTX’s business, finances, operations, and prospects for the purpose of inducing customers to invest, trade, and/or deposit assets with FTX.“
The suit further alleged that these VC firms vouched for the safety and stability of FTX and advertised the exchange’s purported attempts to become properly regulated.
Temasek was one of the early investors in FTX with a $275 million investment. However, after the collapse of the crypto exchange in November 2022, the investment firm wrote off its entire investment and even slashed compensation for the executives responsible for the FTX investment.
Related: Prosecutors will still consider Sam Bankman-Fried’s alleged campaign finance scheme at trial
Temasek, a Singapore state-backed investment firm, also puts the Singaporean government in the hot seat over its failure of oversight.
The FTX collapse created a crypto contagion and cast a shadow of doubt on the entire crypto ecosystem leading to a drought in institutional crypto investment for months.
Magazine: Deposit risk: What do crypto exchanges really do with your money?
DBS Hong Kong CEO Sebastian Paredes warned that Hong Kong’s new stablecoin KYC and AML rules will largely block their use in onchain derivatives trading.
Nigel Farage is on course to be prime minister, according to a seat-by-seat YouGov poll which reveals the scale of Conservative implosion.
The YouGov MRP polling projection, based on a 13,000 sample taken over the last three weeks, suggests an election held tomorrow would see a hung parliament with Reform UK winning 311 of the 650 seats, 15 seats short of the formal winning line of 326.
In practice, once the Speaker and absent Sinn Fein MPs are accounted for, it would be all but impossible for anyone other than Mr Farage to secure the largest number of MP backers and thus become prime minister.
Reform UK has improved its position since the last YouGov MRP in June, when it was 55 seats short of a majority. The projection suggests 306 Reform gains, up from their current seat tally of five, which would be the biggest increase in any election in British history.
The projection of Commons seats in Great Britain puts Reform UK on 311 seats, Labour on 144 seats, Liberal Democrats on 78 seats, Conservatives on 45 seats, SNP on 37 seats and Greens on seven seats, with Plaid on six seats and three seats won by left-wing challengers.
Barely a year after Keir Starmer won a landslide, this result would see Labour lose around two-thirds of their existing seats, down from the 411 they won in last year’s general election.
This is significantly worse than the party’s 2019 result under Jeremy Corbyn when the party won 202 seats and is their lowest tally since 1931.
More than a third of Labour’s remaining seats would be in London, making them more reliant on London than any other British party is on any other nation or region.
Among the big-name casualties would be Yvette Cooper, Wes Streeting, Ed Miliband, Bridget Phillipson, Lisa Nandy and Angela Rayner.
The Conservatives would fare even worse, pushed potentially to the brink of extinction. They would lose two-thirds of their 121 seats won last year – which was already their worst result in their 190-year modern history – reducing their tally to 45 seats.
And even further back, it would be worse than any result they’ve ever suffered, all the way back to the formation of their predecessor party, the Tory Party in the 1670s.
This would put the Tories in fourth place behind the Lib Dems, and the first time they have not been one of the two biggest parties.
The Conservatives would be wiped out in both Wales and the South West, a heartland as recently as 2015, and left with just six seats in the north and one in Scotland.
Robert Jenrick, Priti Patel, James Cleverly and Mel Stride could be among the casualties. Almost 60% of their current front bench would lose their seats.
In theory, the Conservatives could line up with Labour, Lib Dems, Greens, Plaid, SNP, progressive left and Northern Ireland MPs to vote down a Farage premiership, but this is highly unlikely in practice. If they abstain, Mr Farage would still have enough MPs to become PM.
The projections suggest national vote shares of 27% for Reform UK, 21% for Labour, 17% for Conservative, 15% for Lib Dems, 11% for Greens, 3% for SNP and 1% for Plaid.
Some smaller, more recent YouGov polls have put the Reform UK total even higher.
The scale of the threat to Labour from Reform UK is laid bare in this MRP projection.
Three-quarters of Reform UK’s seats would come directly from Labour, while more than half of Labour seats would go directly to Reform UK.
The North East of England would be Reform’s strongest area with 21 of the 27 seats, followed by the East Midlands and Wales. Reform’s weakest areas are London, where they would have six out of 75 and Scotland where they would win five out of 57.
Scotland would see a resurgence of the SNP, an increase of 28 seats to 37 seats, with Labour left with nine seats.
This does not suggest Scottish Labour will be able to win control of the Scottish parliament at next year’s elections.
In Wales, Reform would have 23 seats, against Plaid’s six and Labour’s three, which implies there’s a strong likelihood of Labour losing control in the Welsh Sennedd elections next May.
Voters in Great Britain were asked by YouGov how they would vote in the event of an election tomorrow, even though one is not anticipated for three or four years. MRP projections come with a significant margin of error.
The central projection is that Reform UK gets 311 seats, but this could be as high as 342, which would deliver an overall majority, or as low as 271. The Tories could have as few as 28 seats and as high as 68 seats. Labour’s range could be from 118 to 185.
Labour has previously shied away from addressing concerns over immigration, Sir Keir Starmer has admitted.
The prime minister wrote in The Daily Telegraph that it is now “essential” to tackle “every aspect of the problem of illegal immigration”.
“There is no doubt that for years left-wing parties, including my own, did shy away from people’s concerns around illegal immigration,” he wrote in the newspaper.
“It has been too easy for people to enter the country, work in the shadow economy and remain illegally.”
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Would ‘BritCard’ reduce illegal migration?
To address this problem, Sir Keir said that Labour will introduce a “free-of-charge” digital ID for adults that will be “mandatory for the right to work by the end of this parliament”.
The idea behind the so-called “Brit card” is that it would verify a citizen’s right to live and work in the UK.
The plans would require anyone starting a new job or renting a home to show the card on a smartphone app, which would then be checked against a central database of those entitled to work and live here.
It is hoped this would reduce the attraction of working in the UK illegally, including for delivery companies.
Read more: The pros and cons of digital IDs – and do we need them?
A Brit card proposed by Labour Together. Pic: Labour Together
At the moment, workers have to show at least one form of physical ID in the form of documents, but there are concerns within the government that these can be faked.
Lack of ID cards major pull for illegal migrants
French President Emmanuel Macron has repeatedly warned that the lack of ID cards in the UK acts as a major pull factor for Channel crossings, as migrants feel they can find work in the black economy.
Sir Keir is expected to reveal more details about the “Brit card” in a speech at the Global Progress Action Summit hosted by think tank Labour Together, the Centre for American Progress Action Fund, and the Institute for Public Policy Research in London today.
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How phones may become a form of ID under new laws
“For too many years, it’s been too easy for people to come here, slip into the shadow economy and remain here illegally,” he is set to tell attendees at the summit.
Sir Keir will add: “It is not compassionate left-wing politics to rely on labour that exploits foreign workers and undercuts fair wages. But the simple fact is that every nation needs to have control over its borders.”
The Labour leader is expected to say that campaigners who think of themselves as progressive must look themselves “in the mirror” and identify areas where they have allowed themselves “to shy away from people’s concerns”.
Sir Keir’s ID card U-turn
The plan represents a shift in the government’s position, as last year ministers ruled out the idea following an intervention from Sir Tony Blair just days after Labour won the general election.
The former Labour prime minister has long been an advocate of ID cards and took steps to introduce a system that would begin as voluntary and could later become compulsory while in office.
Last July, then home secretary Yvette Cooper said of the idea: “It’s not in our manifesto. That’s not our approach.”
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Digital ID cards a ‘massive move’ by government
The rollout was scrapped after Labour was ejected from power in 2010, having been opposed by the Liberal Democrats and the Tories at the time.
The idea of ID cards has long been opposed by civil liberty and privacy groups in the UK.
Sir Keir is said to have shared their concerns but came round to the idea amid record-high levels of small boat crossings.
Read more from Sky News:
Two more deported under UK-France returns deal
Campaigners on why they oppose asylum hotels protests
Migrants attempt to cross the English Channel from northern France. File pic: Reuters
A report by the Tony Blair Institute published on Wednesday said digital ID can “help close loopholes that trafficking gangs and unscrupulous employers currently exploit, reducing pull factors driving illegal migration to Britain and restoring control over borders”.
Labour Together, which has been backed by Sir Keir, published a report in June which said digital ID could play a role in right-to-work and right-to-rent checks, supporting “better enforcement of migration rules”.
The announcement has been met with criticism from civil liberty group Big Brother Watch, which said the introduction of ID cards would turn “us into a checkpoint society that is wholly unBritish”, and from Reform UK and the Tories, who argue the ID cards would not stop small boat crossings.
A petition demanding that the government not introduce digital ID cards has already reached half a million signatures.
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