FTX Investors File Lawsuit Against Sequoia Capital and Others

Venture capital and private equity firms, including Sequoia Capital and Thoma Bravo, have recently been sued to establish legitimacy for bankrupt crypto exchange FTX.

According to court documents, these companies touted hundreds of millions of dollars worth of their own investments in FTX-related companies in 2021, creating an “aura of legitimacy” around the latter.

The complaint mentions the defendants’ statement about the thorough review of FTX operations and assurance of the security of the exchange.

Sequoia Capital acknowledged a loss of $213.5 million on an investment in FTX, while Thoma Bravo invested more than $100 million in the exchange.

The complaint reads:

“As a result of the defendants’ significant investment in the FTX organization, each of them was motivated to use their professional reputation and media exposure to portray FTX as a trustworthy and legitimate crypto exchange.”