Why Venture Capitalists Won’t Be Held Accountable for Investing in FTX

As expected, the people most culpable for setting up the FTX fraud will drift away into the night laughing.

As impossible as it is to believe that venture capital funds did proper due diligence on mismanaged and allegedly fraudulent FTX, the inherent risk of early-stage investing makes regulatory change unlikely in the fallout.

I could smell the scam immediately. Super-inflate the valuation of startup by over-paying for a small amount of equity, thereby giving billions into the incompetent hands of a bumbling man-child to fund his wokist friends and ineffective altruists.

Each of the VC funds that invested in FTX said it conducted an appropriate amount of due diligence. That includes Temasek Holdings, which stated it spent eight months of due diligence without identifying a single red flag.

The red flags would have been enough to supply a communist rally. A huge volume of transactions on a platform that few people used, audited by a company nobody had ever heard of.

The full list of VCs makes interesting reading, in that financial gangsters such as BlackRock rub shoulders with total crypto virgins, such as the Ontario Teachers' pension fund.

Even if some VC fund managers did little more than blindly follow Sequoia Capital in investing in FTX, it will be very hard to justify regulatory change from a singular event and a relatively small number of VC funds.

However, it is fine to take the FTX-event as a green-light to screw the crypto scene, when it was TradFi that funded the whole spectacle precisely to accelerate regulations.

Glad to (finally) see I'm not the only one who wants to point the finger of blame on the lead VCs.

I still maintain this was no "error of judgment" but a premeditated scam set up to fail.