Crypto Updates

Temasek and FTX’s Backers Face Growing Class Action

The Rise, the Fall and the Reaction

A class action lawsuit involving Singapore state investor Temasek and the collapsed American cryptocurrency exchange has gained momentum.
Recently, additional plaintiffs have been added to the lawsuit, intensifying
the scrutiny of the alleged violations.

According to a report by
The Straits Times, the amendment to the class action lawsuit was filed by five
plaintiffs in the US District Court for the Northern District of California.
The plaintiffs, Leandro Cabo, Vitor Vozza, Kyle Rupprecht, Warren Winter, and
Sunil Kavuri, are accusing Temasek, Sequoia Capital, SoftBank, and Sino Global
Capital of abetting FTX’s multi-billion dollar fraud.

In particular, the
plaintiffs are accusing the defendants of perpetrating, conspiring, aiding, and
abetting the fraud allegedly conducted by the former executives of the
now-bankrupt cryptocurrency exchange, FTX. The lawsuit has raised questions about
the level of due diligence carried out by the four companies.

In February, Temasek,
alongside 17 other financial institutions, venture capitalists, and accounting
forms, was sued for allegedly conspiring with FTX to defraud investors. The
state investor had invested a substantial amount in FTX before the exchange
collapsed and eventually filed for bankruptcy last November.

Thus, the Singaporean
investments giant was forced to write
off USD $275 million
investment
in FTX. Additionally, in May, Temasek was forced
to cut the pay
of its
investment team and senior management, despite finding no misconduct, to
mitigate the impact of the losses.

Temasek’s Unfolding Saga

In a report by Finance
Magnates
, Temasek said in
its defense that it had examined FTX’s operations and financial records prior
to investing in the company. It stated that at an initial glance, FTX appeared
to be financially viable. However, an influx of customer withdrawals made it
difficult to maintain liquidity in the exchange and caused a significant
decline in the value of its assets.

Singapore’s Deputy Prime
Minister Lawrence Wong said: “It is disappointing when there is a loss, as
in the case of Tamasek’s investment in FTX, Even more so because the loss arose
from what turned out to be a very badly managed company and from possible fraud
and mishandling of customers funds.”

Meanwhile,
sources from Bloomberg reveal that Ryan Salame, the…

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