Acknowledging failure in due diligence, excessive trust in SBF, venture capital Paradigm: SBF is very resistant to others joining the board.

With FTX founder SBF now officially facing trial, the public is no longer just receiving information from the FTX bankruptcy team or SBF's statements, but is able to learn more about the truth behind the FTX collapse from various witnesses and former executives.

Paradigm: SBF Strongly Resists Investors Joining Board of Directors

According to Cointelegraph, during the third day of the trial of SBF case, founder of venture capital firm Paradigm, Matthew Huang, testified that SBF had expressed that having investors join the FTX board of directors would not be very helpful.

He stated that SBF strongly resists allowing investors to join the board of directors.

The structure of the FTX board of directors is unclear. According to SBF's biography excerpt, SBF had stated that the board of directors is in name only and that its main role is simply to sign documents.

SBF Biography Author: SBF Once Considered Spending $5 Billion to Make Trump Withdraw, FTX is Not a Ponzi Scheme

Response to Due Diligence Failure, Paradigm: Too Much Trust in SBF

During two rounds of financing between 2021 and 2022, Paradigm invested $278 million in FTX. Co-founder of Paradigm, Matthew Huang, had several conversations with SBF.

Matthew Huang admitted that there was insufficient due diligence, as they were attracted by FTX's rapid market share expansion and overly relied on information provided solely by SBF.

Although Paradigm still worries that SBF is more focused on Alameda rather than FTX, and that there may be preferential treatment for Alameda's trades on FTX, SBF has tried to convince Matthew Huang that there are no special privileges for Alameda.

For other developments on the third day of SBF's trial, please see:

Former CTO of FTX Testifies: SBF and Core Team Conspired to Commit Fraud, Alameda Can Withdraw Infinitely from FTX