Main enterprise capital agency Sequoia Capital has written down the worth of its funding within the beleaguered crypto alternate FTX, to zero.
Notably, the corporate was a part of the buyers who participated in FTX’s $900 million funding spherical in July 2021, which introduced the alternate’s valuation to $18 billion on the time.
Sequoia Marks Down FTX Funding to $0
In a note to restricted companions (LPs), which was revealed through Sequoia’s Twitter deal with on Thursday (November 10, 2022), the enterprise capital agency said that its funding in FTX and FTX.US – the American-based unit of the alternate – totaling $213.5 million, is marked all the way down to $0.
Right here is the notice we despatched to our LPs in GGFIII concerning FTX. pic.twitter.com/Cgp1Yxk1pz
— Sequoia Capital (@sequoia) November 10, 2022
Sequoia invested $150 million in FTX and FTX.US through its World Belief Fund III, noting that the funding accounted for less than 3% of the overall capital within the fund. The enterprise capital agency reassured LPs that the fund was in good monetary situation because it has realized and unrealized features of $7.5 billion.
There was additionally a separate funding of $63.5 million in each entities by means of the SCGE Fund. However the publicity was 1% of its portfolio.
Sequoia additional stated it at all times carried out an intensive diligence course of earlier than investing and did the identical for FTX. The corporate was a part of 60 buyers who raised $900 million in FTX’s Collection B funding in July 2021, which valued the alternate at an estimated $18 billion.
“On the time of our funding in FTX, we ran a rigorous diligence course of. In 2021, the yr of our funding, FTX generated roughly $1B in income and greater than $250 million in working earnings.”
Whereas Sequoia stated the character and extent of the danger are presently unknown, the agency instructed LPs that it might present extra data on the FTX scenario, which the corporate is “creating rapidly.”
In the meantime, it stays to be seen what motion different FTX backers, like Softbank, and Pantera Capital Temasek, will take.
Responses Proceed to Path FTX Collapse
U.S. Senator Elizabeth Warren weighed in on the FTX saga, stating that the alternate’s collapse was a sign that the business was all “smokes and mirrors.” Sen. Warren, one of many fiercest crypto critics on Capitol Hill, stated she would proceed to push for aggressive enforcement for the SEC to “implement the regulation to guard customers and monetary stability.”
Former Kraken CEO Jesse Powell, in a long tweet thread, slammed FTX CEO Sam Bankman-Fried for his recklessness and sociopathic conduct. Powell additionally stated:
“The injury right here is big. An alternate implosion of this magnitude is a present to bitcoin haters all around the world. It’s the excuse they had been ready for to justify no matter assault they’ve been preserving of their again pocket. We’re going to be working to undo this for years.”
The ex-Kraken chief additionally blamed U.S. regulators and lawmakers for not offering an enabling setting and appropriate regulatory insurance policies for crypto firms to function.
This text first appeared on CryptoPotato
Right here’s How To Keep Up To Date On Crypto With CRU Information Desk!
For the perfect exchanges, try our high alternate information.
Join our bi-weekly publication for information and unique evaluation.
Follow CRU News Desk on Twitter for our newest articles and Twitter unique threads.
Study Bitcoin, Ethereum, and a lot extra on the CryptosRus Academy.
Keep updated with George on Tik Tok, Instagram, and his model new clips channel.