MEXCFTX Reports $51 Billion Crash In Collateral, Sequoia Apologises Investors
On Tuesday, November 22, in a letter to staff, FTX founder Sam Bankman-Fried outlined a $51 billion crash in the company’s collateral which has dropped to $9 billion from $60 billion.
In his letter obtained by Bloomberg, SBF wrote that a combination of sell-offs in cryptocurrencies, a credit squeeze, and a “run on the bank” left the collateral at only $9 billion ahead of the company’s filing for Chapter 11 bankruptcy.
The estimated liabilities by then had reached $8 billion. The fall in the value of FTX’s crypto assets alone halved the collateral to $30 billion. In a message to employees, FTX chief Sam Bankman-Fried wrote:
“I didn’t mean for any of this to happen, and I would give anything to be able to go back and do things over again. I did not realize the full extent of the margin position, nor did I realize the magnitude of the risk posed by a hyper-correlated crash”.
The bankruptcy proceedings so far have revealed some of the chaotic organizational practices at FTX with deep-rooted problems. The proceedings reveal lax documentation and financial controls. It also shows payment requests approved with just emojis in chatrooms.
Additionally, the company used its funds to buy homes and other personal items for employees and advisers. As per some reports, SBF’s parents and some senior staff at FTX purchased properties worth a staggering $300 million in the Bahamas. Besides, speculations are also ripe that Sam Bankman-Fried has been behind the $600 million hack of the crypto exchange FTX.
Sequoia Apologizes to Investors for FTX
As we know venture capital giant Sequoia Capital was one of the biggest investors in FTX. However, as the crisis unfolds, top partners at the VC firm apologized to investors during a conference call on Tuesday, November 22.
In the call, Roelof Botha, the firm’s global leader, said that he and his colleagues repent for backing the company. Sequoia Capital had invested a total of $214 million in FTX.com and FTX.us across two funds.
- Crypto Market Tumbles as Jerome Powell Says December Rate Cut ‘Far From Certain’
- FOMC Meeting: Federal Reserve Lowers Interest Rates by 25 Bps in Second Cut of the Year
- WLF Token Jumps 7% as Former Robinhood Counsel Joins Trump-Backed World Liberty Financial
- Changpeng Zhao “CZ” Warns Investors “Don’t Buy” Golden Statue Meme Coin After 27,000% Surge
- Markets Expect October Fed Rate Cut as Bitcoin Repeats Post-FOMC Pattern
- Ethereum Price Flips BTC in Strategy Shift, Eyes $4500 Level
- Expert Predicts XRP Price to Hit $10 as Elliot Wave, XRPR ETF Inflows Align
- HYPE Price Prediction as 21Shares Files S-1 for Hyperliquid ETF—Can Bulls Push HYPE to $60?
- Bitcoin Price Rally Bound? How the Fed’s Move May Unleash Crypto
- Can ASTER Price Rebound 50% as Whale Activity and Bullish Pattern Align?
- Pi Network Patterns Point to More Gains Despite Manipulation Claims
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
