- Sequoia Capital Invested more than $214 million in FTX’s domestic and international businesses.
- The Capital firm has marked down the entire $214M FTX stake to zero.
- They now have around $85 billion in assets now under control.
The Sequoia Capital team just revealed that they were entirely devaluing their FTX holdings. Sequoia cited FTX’s “liquidity crisis” and “solvency risk” as justifications for its decision in a letter to investors. Last year, the VC company invested over $214 million in FTX’s worldwide and US companies.
Recently, a liquidity crunch has created solvency risk for FTX. The full nature and extent of this risk are not known at this time. Based on our current understanding, we are marking our investment down to $0.Sequoia Capital
Keeping in view, until a day ago FTX was halfway through being bought by Binance, the biggest exchange in the world. A recent rumor, however, indicated that Binance was probably going to back away from taking over the troubled business.
Sam Bankman-Fried, the founder of FTX, also just deleted a string of tweets that guaranteed the security of all the assets on the exchange. Hence given FTX’s present situation, investors have been staying away from it.
Reportedly, as part of FTX’s $900 million Series B investment round in July 2021, Sequoia made investments in the now-cash-strapped cryptocurrency exchange. At the time, this was the biggest crypto investment ever documented.
Sequoia told its partners that it thoroughly investigates each and every investment with due diligence, and FTX was no exception.
We are in the business of taking risks. Some investments will surprise to the upside, and some will surprise to the downside.Sequoia’s letter
Sequoia added that it would communicate its next movements to its partners when more information becomes available.
Sequoia Capital now has around $85 billion in assets now under control. Additionally, it has made early investments in digital behemoths Apple and Google as well as more recently Airbnb.
Recommended News :
Crypto News Land (cryptonewsland.com) , also abbreviated as “CNL”, is an independent media entity — we are not affiliated with any company in the blockchain and cryptocurrency industry. We aim to provide fresh and relevant content that will help build up the crypto space since we believe in its potential to impact the world for the better. All of our news sources are credible and accurate as we know it, although we do not make any warranty as to the validity of their statements as well as their motive behind it. While we make sure to double-check the veracity of information from our sources, we do not make any assurances as to the timeliness and completeness of any information in our website as provided by our sources. Moreover, we disclaim any information on our website as investment or financial advice. We encourage all visitors to do your own research and consult with an expert in the relevant subject before making any investment or trading decision.