From SBF rescuing insolvent crypto companies left and right just months earlier to his empire in a near-doom state needing a bailout, there appears no light at the end of the tunnel as the current crypto market depression intensifies.
Many experts commented that the current crypto winter would separate the chaff from the wheat. No one imagined FTX in this context. Now that the unthinkable has happened, it does not end there. Strategic investors of FTX are now blindsided by the latest fallout.
FTX Venture Investors in Deep Trouble
Some of the prominent investors in the crypto exchange include – BlackRock, Ontario Pension Fund, Sequoia, Paradigm, SoftBank, Circle, Ribbit, Alan Howard, Multicoin, VanEck, and Temasek.
Sequoia invested in a $420 million round in the company at a $25 billion valuation in October 2021. Additionally, some of the heavy hitters in the capital market, namely Temasek, Paradigm, NEA, SoftBank, Lightspeed Venture Partners, Tiger Global, Insight Partners, the Ontario Teachers’ Pension Plan Board, and others, poured in capital worth $400 million at $32 billion in January 2022.
According to The Information, four of FTX’s backers reportedly said that the fate of their equity stakes hangs in limbo as concerns they figure out the impact of the Binance deal. The report also mentioned that another of FTX’s investors said they were “fielding texts” from limited partners throughout the day and added that these institutional investors fear that their stakes might wipe out completely.
Curry, Brady, and More Risk Plunging Into Massive Losses
Celebrity investors also made their way to FTX. Basketball star Stephen Curry, for one, signed a partnership with the platform in September 2021. Interestingly, this was his first investment in the crypto industry while his – Eat.Learn.Play. – foundation joined hands with FTX on several charitable initiatives.
Another high-profile individual caught in the drama is National Football League (NFL) star quarterback Tom Brady. After many personal and professional setbacks, Brady’s net worth is now at a big-time risk.
The Football superstar and his wife, model Gisele Bündchen entered into a long-term relationship with FTX in 2020. It signaled his intention to enter the crypto industry. As part of the deal, both received Bitcoin in addition to an equity ownership stake in the company.
The former couple put their combined net worth of $650 million. While Brady was said to have taken up the role of FTX’s brand ambassador, the former Victoria’s Secret cover girl served as the environmental and social initiatives advisor.
Tiger in Trouble
Losses from FTX investment do not stop there. Tiger Global Management, a hedge fund spearheaded by billionaire Chase Coleman, is also one of the most prominent backers in Sam Bankman-Fried’s crypto exchange. It must be noted that Tiger participated, alongside a group of investors, in FTX’s January Series C round in addition to the Series B round that valued FTX at $25 billion.
As tech and Chinese stocks failed to perform, Tiger’s flagship hedge fund lost over 50% this year. Another Tiger fund, which focuses on public equities and private equity investments, also plummeted by 44%. FTX bailout could further prove disastrous for it.
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