Venture capital and private equity firms including Sequoia Capital, Thoma Bravo and Paradigm were accused in a lawsuit of promoting the legitimacy of FTX, the cryptocurrency exchange that collapsed causing billions of dollars in losses.
The class-action suit filed on behalf of investors on Tuesday claims that the firms engaged in a promotional marketing campaign in 2021 to tout their own hundreds of millions of dollars in FTX entities. According to the investors, this provided a “air of legitimacy” to the company, which went bankrupt in November and whose co-founder Sam Bankman-Fried is now facing criminal charges.
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