At some level, these big name funds also deserve some portion of the blame. A lot of people implicitly trusted FTX because of its backers. Even when the first signs of FTX imploding emerged, some people chose to stick with it because “Blackrock, Softbank and Sequoia can’t be that wrong”.

Little did they know that the due diligence process for Sequoia wasn’t any better than any random no-name fund.