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?
Venezuela’s reliance on stablecoins could deepen if the Trump administration acts on its war threat, further destabilizing the South American nation.
The Home Office has confirmed that hundreds of migrants will be moved to military sites as the government tries to stop the use of asylum hotels.
About 900 men will be temporarily based at Cameron Barracks in Inverness, and Crowborough Training Camp in East Sussex.
A Home Office spokesperson said: “We are furious at the level of illegal migrants and asylum hotels. This government will close every asylum hotel.
“Work is well under way, with more suitable sites being brought forward to ease pressure on communities and cut asylum costs.”
Industrial sites, temporary facilities and disused accommodation are also being considered as officials step up work to find alternatives.
The plans – first mooted by the defence secretary last month – have been confirmed ahead of the expected deportation of an asylum seeker who was accidentally released while serving a sentence for sexual offences.
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Lammy: Kebatu will be deported ‘this week’
Hadush Kebatu was mistakenly freed from HMP Chelmsford on Friday – sparking a manhunt – with the Metropolitan Police arresting him in Finsbury Park on Sunday.
Justice Secretary David Lammy has confirmed there will be an independent investigation into what happened and said “human error” was to blame for the incident.
Pressure on jail staff ‘intolerable’
But the Prison Officers’ Association (POA) has warned it will “not accept any scapegoating of staff” – and claims it has highlighted “a severe lack of training” for at least a decade.
Mark Fairhurst, the union’s national chair, said: “The pressure on staff is intolerable, and this will inevitably lead to mistakes.
“These issues should have been addressed a long time ago, but as usual, our employer waits for a headline and then acts.”
The POA has warned this could happen again in the future because prisons are understaffed and overcrowded.
One member of staff at HMP Chelmsford has been suspended pending an investigation, with some MPs calling for the prison’s governor to step down if they are found at fault.
Kebatu was found guilty in September of sexually assaulting a 14-year-old girl and a woman in Epping – about a week after he arrived in the UK on a small boat.
He had been staying at The Bell Hotel, which was being used to accommodate asylum seekers, and the case sparked weeks of protests over the summer.
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Father of Kebatu victim: ‘I am broken’
‘Urgent review’ ordered
In the Commons yesterday, Mr Lammy said he was “livid” on behalf of Kebatu’s victims – and vowed he would be deported back to Ethiopia “as quickly as possible”.
He dismissed Conservative MPs who asked whether he would resign over the issue, describing this as a “ridiculous question”.
The deputy prime minister added he has ordered an “urgent review” into the checks that take place when an offender is freed, and new safeguards have been added.
Read more:
How manhunt for Kebatu unfolded
‘Billions wasted on asylum hotels’
The government wants to stop the use of hotels to house small boat migrants. File pic
From now on, foreign criminals facing deportation will only be able to be released when a duty governor is physically present.
But with a prison service source telling Sky’s Mollie Malone that these checks could take staff an extra 30 to 40 minutes, former governor Pia Sinha has warned: “The solution is not adding more administrative burden.”
Data shows 262 prisoners in England and Wales were released in error in the 12 months to March 2025 – a 128% increase on the previous year.
US Representative Ro Khanna is looking to introduce a bill to restrict all elected officials from trading stocks and crypto, citing conflicts of interest.
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