Sign Up on 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.
- Analyst Calls $6 XRP Target for November Amid Ripple CEO’s White House Stockpile Hint
- Ethereum Faces Selloff Risks As Whales’ Unrealized Profit Hits 2021 Highs
- Expert Predicts 138% Shiba Inu Rally as SHIB Futures Listing Opens Spot ETF Path
- Bitcoin Will 200x From Here, Twenty One Capital CEO Says as BTC Breaks $117K After Fed Rate Cut
- BNB Chain Takes Lead in RWA Tokenization, Expert Sees BNB Rally to $1,300
- HBAR Price Prediction as SEC Approves Generic ETF Framework – Analyst Targets $1.80
- Toshi Coin Gains 57% in One Day: What’s Driving the Sudden Upside?
- Shiba Inu Price Set to Soar as Exchange Reserves Dive Amid SHIB ETF Chatter
- Pepe Coin Price Prediction as Whale Moves $25M From Robinhood- Is a Breakout to $0.00002 Next?
- XRP Price Prediction as Market Longs Hit 78% amid VivoPower Treasury Expansion Launch — Is $4 Next?
- SHIB Price Forecast: Taker Buys Lead as Developers Counter Shibarium Exploit
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.
