FTX Investors Are Back in the Spotlight—as Victims

Sam Bankman-Fried’s criminal trial, set to kick off with jury selection on Oct. 3, will thrust the FTX founder and the collapse of one of the world’s biggest crypto exchanges back in the spotlight. It will be a brutal reminder of a huge misstep by Sequoia Capital, Paradigm and other investors who poured a total of $2 billion into Bankman-Fried’s companies.

Fraud committed against those investors is a key part of the trial, and federal prosecutors intend to focus on venture capitalists as victims, not enablers. Bankman-Fried has been charged not only with siphoning billions of customer money from FTX accounts before it collapsed, but also with lying to FTX’s investors and lenders about the exchange’s risk management and finances.