Just in: Sam Bankman-Fried to be sued by big VCs
As more information comes out about the Sam Bankman-Fried crypto business, it seems that big investors are ready to file a lawsuit. According to reports, venture capitalists who invested heavily into FTX are set to sue the founder of FTX for fraud. Despite the company’s announcement of bankruptcy proceedings, investors will only make matters worse for the troubled crypto exchange. The VCs want to recover their investments from the company.
According to The Information, venture capitalists involved in billions of dollars in FTX investments are considering a lawsuit. According to the report, the lawsuit would seek to recover money to compensate shareholders for any losses. This comes after the company last week declared that it would file voluntary chapter 11 bankruptcy. FTX.com, Alameda Research, and approximately 130 other affiliated companies were included in the chapter 11 bankruptcy proceedings.
The FTX crisis intensified regulatory action against crypto entities already under intense scrutiny. The White House said that they were closely monitoring the situation with the relevant regulators. FTX’s liquidity crisis also had an impact on other crypto exchanges it held stakes in. Due to FTX bankruptcy-related issues, Liquid, a Japanese crypto exchange, stopped withdrawing funds Monday.
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