Key Ideas:
- The SEC suspects Dave of using user funds, and FTX invested $200 million in Mysten Labs.
- The SEC suspects Dave of using user funds, and FTX invested $200 million in Mysten Labs.
- The customer can receive a refund if it can be verified.
According to CNBC, the SEC is suspecting Dave of being the source of the billions in customer deposits that vanished from FTX in a flash. FTX invested $200 million in Mysten Labs.
In two complaints, the U.S. Securities and Exchange Commission claimed that FTX and SBF may have used client funds to invest two $100 million deals through their subsidiaries.
A fintech business called Dave, which went public two months prior via a special-purpose acquisition company, reportedly secured a $100 million investment in March. The businesses pledged to "work together to build the digital asset ecosystem" at the time.
Then, in September of this year, Web3 firm Mysten Labs obtained a $100 million investment. Coinbase Ventures, Binance Labs, and the cryptocurrency fund of Andreessen Horowitz participated in the financing round for Mysten, which has a $2 billion valuation.
Based on records revealed by the Financial Times, which examined how the company used $5.2 billion, Mysten Labs and Dave's investment are the only two acknowledged investments of $100 million, even though FTX Ventures has reportedly done dozens of acquisitions, according to PitchBook. In a news release with Dave, FTX Ventures is referred to as a $2 billion venture capital fund.
Despite the denials of Mysten Labs and Dave, the US Securities and Exchange Commission has publicly "disguised" these two venture capital cases as being related to FTX's alleged use of funds believed to be from consumers.
Mysten Labs also declined to comment on the situation, and Sullivan & Cromwell, the law firm representing FTX, has not yet responded to inquiries for comment. However, CEO Dave Jason Wilk stated that the company's investment in FTX is made through convertible bonds, not cash investments.
After FTX, which had been valued at $32 billion by private investors earlier this year, filed for bankruptcy in November, Sam Bankman-Fried, 30, was charged with extensive fraud. according to allegations, Bankman-Fried transferred funds from FTX to its hedge fund, Alameda Research, and utilized those funds for dubious loans and transactions. That strategy apparently includes FTX Ventures.
