FTX founder Sam Bankman-Fried has not only been a tireless fundraiser from venture capital firms including Paradigm and Sequoia Capital, but he has also quietly invested in those same funds, according to two people familiar with the matter. The unusual moves show how entangled Silicon Valley VC firms are in the collapse of the Bankman-Fried crypto empire, which has already forced these companies to reduce the value of their FTX shares, which were previously worth hundreds of millions of dollars, to zero. .
Bankman-Fried trading company Alameda Research, which had close ties to its cryptocurrency exchange FTX and closed this week, invested at least $ 20 million in Paradigm last year, according to two people with first-hand knowledge of the question. Separately, Alameda Research and FTX Ventures, a risk arm backed by Bankman-Fried’s personal money, have pledged hundreds of millions of dollars to Sequoia Capital, Altimeter Capital Management and Multicoin Capital, according to four people familiar with the matter. Funds linked to Bankman-Fried also supported K5 Global, an investment and advisory fund managed by Michael Kives, a close adviser to Bankman-Fried.