FTX, one of the largest cryptocurrency exchanges in the world, quickly collapsed.
FTX, Alameda Research Trading Company, West Realm Series, and 130 affiliates filed for bankruptcy protection late last week, just days after another cryptocurrency exchange pulled out of a deal to acquire it and flagged red flags during due diligence. The troubled company would also be subject to potential government investigations.
Its founder, Sam Bankman-Fried, resigned as CEO on Friday, leaving the reins to former Enron liquidator John J. Ray III. Bankman-Fried and company have been accused of secretly transferring funds from FTX clients to his trading company, according to Reuters.
Here is some eentities and individuals potentially impacted by the collapse of FTX.
Sequoia Capital had “limited” exposure to FTXwith one fund having invested $150 million in FTX.com and FTX US and the other having invested $63.5 million, according a note the venture capital firm sent to limited partners and shared Nov. 9 on Twitter.
“FTX is not in the fund’s top ten positions, and our $150 million cost base represents less than 3% of the fund’s committed capital,” Sequoia said of its investment in Global Growth Fund III. “The $150 million loss is offset by approximately $7.5 billion of realized and unrealized gains in the same fund, so the fund remains in good shape.”
The other FTX position was equivalent to “less than 1% of the SCGE fund’s portfolio as of 9/30/2022 (at fair value),” according to Sequoia Capital.
The venture capital firm said it had decided to “return our investment to $0”.
Soft Bank participated in FTX fundraisers in the past, including contributing to the Series C which raised $400 million for the cryptocurrency exchange, according a press release at the end of January.
MarketWatch reported on Friday that a SoftBank executive, Yoshimitsu Goto, said that a minor investment, less than $100 million, had been granted to FTX by the company. Anonymous sources said Reuters and Bloomberg that SoftBank intends to write it off as a total loss.
Tom Brady and Gisele Bundchen
Tampa Bay Buccaneers quarterback Tom Brady and his now ex-wife Gisele Bundchen entered into a deal with FTX in June 2021 in which he became an ambassador and she became an advisor for environmental and social initiatives, FTX announced. in a press release at the time.
They each took a stake in FTX as part of the partnership, as well as in the cryptocurrency, according to the statement.
Due to the stock market filing for bankruptcy, the stakes in the company lost value.
Stephen Curry, point guard Golden State Warriors, signed a “long-term partnership” with FTX in September last year. He became a global ambassador for FTX, a role intended to “expand the reach of the FTX brand and tout the viability of cryptocurrency to new audiences.” according a press release announcing the agreement.
For his ambassador contract, Curry received a stake in the company, FTX said at the time. His foundation has also reportedly agreed to partner with charitable efforts.
The number of affected FTX clients remains unclear at this time.
Court documents recently submitted to a US Bankruptcy Court by FTX lawyers have suggested that more than a million creditors could be affected. The company said there are 100,000 creditors — most of whom are customers — they know of, FOX Business Previously reported.
FTX’s native token, FTT, has also seen its value drop precipitously in recent days. The CEO of Binance, another cryptocurrency exchange, said on Sunday that he had stopped accepting FTT repositories, and others would have removed the token from the list.
FOX Business has reached out to Sequoia Capital and SoftBank for comment, along with a representative from Curry. A rep for Brady declined to comment.