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.
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.
Canterbury MP Rosie Duffield has resigned from the Labour Party.
The 53-year-old MP is the first to jump ship since the general election and in her resignation letter criticised the prime minister for accepting thousands of pounds worth of gifts.
She told Sir Keir Starmer the reason for leaving now is “the programme of policies you seem determined to stick to”, despite their unpopularity with the electorate and MPs.
In her letter she accused the prime minister and his top team of “sleaze, nepotism and apparent avarice” which are “off the scale”.
“I’m so ashamed of what you and your inner circle have done to tarnish and humiliate our once proud party,” she said.
Since December 2019, the prime minister received £107,145 in gifts, benefits, and hospitality – a specific category in parliament’s register of MPs’ interests.
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Ms Duffield, who has previously clashed with the prime minister on gender issues, attacked the government for pursuing “cruel and unnecessary” policies as she resigned the Labour whip.
She criticised the decision to keep the two-child benefit cap and means-test the winter fuel payment, and accused the prime minister of “hypocrisy” over his acceptance of free gifts from donors.
“Since the change of government in July, the revelations of hypocrisy have been staggering and increasingly outrageous,” she said.
“I cannot put into words how angry I and my colleagues are at your total lack of understanding about how you have made us all appear.”
Ms Duffield also mentioned the recent “treatment of Diane Abbott”, who said she thought she had been barred from standing by Labour ahead of the general election, before Sir Keir said she would be allowed to defend her Hackney North and Stoke Newington seat for the party.
Her relationship with the Labour leadership has long been strained and her decision to quit the party comes after seven other Labour MPs were suspended for rebelling by voting for a motion calling for the two-child benefit cap to be abolished.
“Someone with far-above-average wealth choosing to keep the Conservatives’ two-child limit to benefit payments which entrenches children in poverty, while inexplicably accepting expensive personal gifts of designer suits and glasses costing more than most of those people can grasp – this is entirely undeserving of holding the title of Labour prime minister,” she said.
Ms Duffield said she will continue to represent her constituents as an independent MP, “guided by my core Labour values”.