Matthew Huang, co-founder and managing partner of crypto investment firm Paradigm, said FTX founder Sam Bankman-Fried was “very resistant” to investors joining FTX’s board. Huang testified in New York federal court that Bankman-Fried did not think there would be much benefit from having investors on FTX's board.

Despite concerns over FTX’s lack of formal structure and its potential entanglement with sister hedge fund Alameda Research, Huang said investors were attracted by FTX’s rapid expansion of market share in the crypto industry. However, Huang noted that he and other investors in Paradigm were concerned that Bankman-Fried might spend more time on Alameda instead of FTX, a distraction that would come at the expense of Paradigm’s investment.

Additionally, Huang noted that there are concerns that Alameda may have received preferential treatment from FTX. If those concerns prove to be true, Huang said he worries it could cause reputational damage to the company.