Claim BonusFTX 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.
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.
Premium Partners
Delivered every day.
- Insights that move markets
- 100,000 active subscribers
Related Articles
- Senator Kennedy Confirms CLARITY Act Markup Next Week After Bipartisan Senate Meeting
- Tom Lee’s BitMine Increases Staked ETH To $2.5B as Ethereum Staking Queue Surges
- Trump Tariffs: U.S. Supreme Court Sets January 9 for Possible Ruling
- Fed’s Stephen Miran Backs 100+ Bps of Rate Cuts as Crypto Traders Price In Only Two
- Why is SUI Price Up Today (Jan 6)
- Here’s Why Solana Price Will Hit $200 This Month
- Bitcoin Price Rally Could Hit $107K, Legendary Trader Predicts Ahead of US Jobs Data
- Top 3 Crypto Prices Prediction: Dogecoin, Cardano, and Chainlink Poised for Big Moves
- Ethereum Price Eyes $4K as BitMine Stakes $2.5B in ETH
- Bitcoin and Gold Price Prediction as Venezuela Conflict Fuels Investor Uncertainty
- Expert Predicts a 246% Shiba Inu Price Surge as a Rare Pattern Forms
