The Israeli startups that benefited from Sam Bankman-Fried’s investments

Sam Bankman-Fried, founder of cryptocurrency exchange FTX, who is facing eight lawsuits for fraud, conspiracy, money laundering and illegal campaign donations, said his company FTX Ventures and Alameda Research has invested in at least two Israeli startups StarkWare and Solidus Labs.

StarkWare and Solidus were funded by Bankman-Fried and his colleagues through mass fraud and theft of customer funds, according to US investigators. It was part of a list of nearly 500 companies held by Bankman-Fried that were handed over to the United States, with a total valuation of about $5.4 billion.

According to U.S. officials, FTX stole a total of $10 billion in customer funds, some of which was lost by Alameda through risky transactions, and some for personal use, political and social donations, and investments. It was used to purchase luxury properties. Crypto, trading, and media organizations.

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Sam Bankman Fried in court

Sam Bankman-Freed heading to court.

(Photo: Stephanie Keith/Bloomberg)

The 500-company portfolio list first revealed by the Financial Times, held through 10 different companies, was used as collateral by FTX in a last-ditch attempt to raise capital and avoid bankruptcy in November. . Its largest holdings include stakes in crypto mining firm Genesis Digital, venture capital giant Sequoia, Anthony Scaramucci’s investment firm Skybridge, and SpaceX.

According to the listing, SBF-controlled companies have invested at least $14 million in StarkWare in three funding rounds, including the last two. StarkWare, which develops scalability and privacy solutions for blockchain technology, raised his $100 million at an $8 billion valuation this past May. The Netanya-based company raised $50 million at a $2 billion valuation last November.

StarkWare was founded in 2018 by Uri Kolodny (CEO), Eli Ben-Sasson (President), Michael Riabzev (Chief Architect), and Alessandro Chiesa (Chief Scientist). The company aims to use zero-knowledge proofs to solve blockchain-specific problems. The company employs over 80 of his employees, most of whom are located outside the Netanya office.

SBF also purchased Starknet tokens not yet available for trading for a total of at least $33,000. Besides Alameda, Starkware’s investors include GreenOaks Capital, Coatu, Sequoia, Founders Fund, Paradigm and Three Arrows, which have since gone bankrupt.

Solidus Labs has a smaller investment, believed to be around $500,000 made in the company’s $20 million Series A in May 2021. The company also raised his $45 million Series B led by Liberty City Ventures this May, which included Evolution Equity. Partners, Declaration Partners, Hanaco Ventures, and Avon Ventures.

Solidus was founded in 2017 by Asaf Meir, Chen Arad and Praveen Kumar. Employing approximately 100 employees, primarily in Israel, it provides a crypto-native risk monitoring suite serving crypto and DeFi platforms, financial institutions, and regulators. FTX was one of the company’s customers.

FTX’s new management has already announced that it will receive political contributions made by SBF, but funds invested in companies such as StarkWare and Solidus could be sold or bought back by the companies. I have.

StarkWare declined to comment for this matter. Solidus said the services it provides are not related to his FTX risk management and eventual collapse, stating: financial institutions and venture capital funds; The company has always called for greater regulation of cryptocurrencies. ”

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