FTX News: Sequoia Capital To “Write-Off” $210 Mln Amid Bankruptcy Risks

Crypto exchange FTX continues to face a liquidity crunch as rival Binance backs away from a potential acquisition. FTX’s website is back online with a banner that states, “FTX is currently unable to process withdrawals. We strongly advise against depositing.” Meanwhile, Sequoia Capital on Thursday announced that it’s marking investments in FTX to $0 due to bankruptcy risks.
Sequoia Capital Marks Its Investment in FTX to $0
Venture capital firm Sequoia Capital in a tweet on November 10 disclosed that it’s marking over $210 million in investments in FTX to $0. The venture capital firm cites a letter sent to its LPs about investments in FTX, which currently faces a liquidity crunch and risks insolvency.
“In recent days, a liquidity crunch has created solvency risk for FTX. The full nature and extent of this risk is not known at this time. Based on our current understanding, we are marking our investment down to $0.”
Sequoia Capital clarified that it has limited exposure to beleaguered FTX. Global Growth Fund III (GGFIII) is the only private fund with exposure to FTX.com and FTX US. Moreover, FTX is “not a top ten position in the fund,” with a $150 million cost basis accounting for less than 3% capital in the fund. In fact, almost $7.5 billion in realized and unrealized gains offsets the $150 million loss.
Sequoia and other members of an FTX advisory board reportedly held a call with FTX CEO Sam Bankman-Fried. However, the detailed balance sheet data has not been shared with any investors. Moreover, other investors also look to write-off their investments in FTX to zero. Crypto exchange was valued at $32 billion after raising funding this year.
Binance Backs Out From Proposed Acquisition
Crypto exchange Binance on Wednesday backed out from the proposed acquisition of FTX. It cites mishandled customer funds and alleged US agency investigations as reasons for not pursuing the proposed acquisition.
Other investors including Singapore’s state firm Temasek are currently engaging with FTX. The rumor of a potential state-sponsored bailout is currently spreading on Crypto Twitter.
- ‘Floki Is The CEO’: FLOKI Surges Over 20% After Elon Musk’s Name Drop
- Breaking: Ripple-Backed Evernorth to Establish $1B XRP Treasury to ‘Accelerate’ XRP’s Adoption
- Breaking: Michael Saylor’s Strategy Acquires 168 Bitcoin as Crypto Market Rebounds
- Breaking: $10T BlackRock Launches Bitcoin ETP in London As UK FCA Eases Crypto Ban
- How Will “Unusual” US CPI Inflation Data Release Could Impact Fed Rate Cut, Crypto Market?
- Pi Coin Price Eyes 50% Upswing As AI-Powered App Studio Update Ignites Optimism
- Bitcoin Price Prediction as Gaussian Channel Turns Green Amid U.S.–China Trade Progress and Fed Rate Cut Hopes
- Solana Price Prediction: Analyst Notes Bearish Breakdown Amid Derivatives Slowdown
- Shiba Inu Price Eyes Recovery as Burn Rate Jumps 10,785% – Can SHIB Hit $0.000016?
- Ethereum (ETH) Price Prediction: Analyst Eyes $7,000 by Q4 as Bitmine Accumulates $281M ETH — Will History Repeat Itself?
- HYPE Price Teeters Amid Weak Technicals and Soaring Liquidations