As per recent filings, it was revealed that Bankman-Fried invested a total of 2.5 billion USD in a fund managed by Paradigm.
Moreover, the firm later invested in FTX and its US exchanges by Paradigm One.
Paradigm was a prominent investor who assisted the FTX team with its Series B fundraising in July 2021.
and former CEO of FTX, invested more than $20 million USD in Paradigm, a venture capital firm that later purchased a share in FTX.
As the court proceedings of a former crypto billionaire continue, various information is becoming public. In the bankruptcy filing this week, it was revealed that Sam Bankman-Fried invested a total of 2.5 billion USD in a fund managed by Paradigm. Also, the firm later invested in FTX and its US exchanges by Paradigm One.
Paradigm noted that Bankman-Fried was treated similarly to the other investors in its fund. It was established in 2018 by former Sequoia Capital partners Matt Huang and Coinbase co-founder Fred Ehrsam.
According to a spokesperson, Paradigm, based in San Francisco, also disclosed wide conflicts of interest to Paradigm One investors, including the likelihood that the fund would invest in businesses managed by its limited partners.
Paradigm was a prominent investor who assisted the FTX team with its Series B fundraising in July 2021. Later that year, in November, Alameda Research launched Paradigm One, in which it held a 20 million USD stake. Later, they increased it by 5 million USD by purchasing from another corporate investor. In February 2022, it joined the FTX fundraising, and the company, along with its US wing, was valued at 40 billion USD.
After FTX declared bankruptcy on November 11, 2022, the firm wiped off its $278 million USD stake in FTX. Huang, the company's co-founder, eventually voiced regret for investing in Bankman-Fried’s empire.
Sam Bankman-Fried has invested in various venture capital firms such as UVM Signum and Sequoia Capital. They were big supporters of FTX. As per a Financial Times investigation, Alameda Research, FTX's sister firm, invested more than $200 million USD in funds managed by Sequoia.
He is accused of scamming those investors and misusing funds from FTX clients to promote his Alameda Research hedge fund, which largely invests in risky start-ups and crypto assets. He also deceived investors by making misleading financial claims.
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