Consumer Law

FTX Customers Sue Financiers for Fraudulently Promoting Crypto Exchange Prior to Bankruptcy

Former customers of Sam Bankman-Fried’s FTX have sued three venture capital and private equity firms, accusing them in a proposed class action of fraudulently promoting the cryptocurrency exchange before it went bankrupt.

According to a complaint filed late Tuesday in San Francisco federal court, Sequoia Capital, Thoma Bravo and Paradigm were “incentivized” in 2021 and 2022 to tout FTX by the more than $550 million they invested prior to its sudden collapse.

The customers said the defendants lent FTX an “air of legitimacy” by vouching that they had examined its operations–with a Sequoia executive once saying “we did our homework”–and found them “safe and secure” for cryptocurrency investors.

Read the source article at yahoo.com

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