Paradigm Co-Founder Testifies FTX Misled Investors on Use of Customer Funds

Paradigm co-founder Matt Huang testified that FTX's use of customer funds to prop up Alameda Research would have affected the firm's decision to invest.

Huang stated that Paradigm was unaware Alameda could access FTX customer deposits and wouldn't have invested knowing that.

Huang testified that Bankman-Fried falsely claimed Alameda didn't get preferential treatment, when it was exempt from FTX's liquidation engine.

Prosecutors allege Bankman-Fried inflated FTX's reported profits to lure investors like Paradigm.

Huang said he expressed concerns about FTX's lack of governance, but Bankman-Fried resisted adding investors to the board.