The failure of the world’s second-largest cryptocurrency exchange FTX has alarmingly rapid repercussions throughout the cryptocurrency industry. Sam Bankman-Fried, the company’s creator, probably lost billions of dollars in the FTX meltdown, but it’s also terrible news for many prominent figures in the sector.
Severely Impacted Firms
BlockFi
BlockFi is on the brink of bankruptcy, filing for Chapter 11 bankruptcy protection due to the firm’s exposure to the now-collapsed crypto exchange FTX.
Salt
The lending/borrowing platform Salt has just announced the halting of users’ deposits and withdrawals. Salt’s CEO emphasised that the demise of FTX had affected the company’s business.
Oxygen (OXY) & Maps .me
Oxygen (OXY) and Maps .me (MAPS) are in trouble because FTX holds most of their tokens and oversees the token economic system. The impacted companies say they are seeking legal help.
Those Who Disclosed Their Losses
Investment Funds
Amber Group
Amber Group confirmed that it is not involved with Alameda or FTX. However, it has actively participated in trading, with around 10% of the total trading capital being “stranded” on the FTX exchange.
1) We’ve experienced multiple market cycles over the past 5 years, and our focus has been and continues to be the same – delivering an industry-leading service for trading, storing, hedging, and managing digital assets with a key focus on these core pillars.
— Amber Group (@ambergroup_io) November 9, 2022
Sequoia Capital
Sequoia Capital stated that it will mark its investment in FTX down to zero due to recent developments involving FTX and the fact that the full substance of the lawsuit is yet unknown.
Their Global Growth Fund III made a $150 million investment in FTX and FTX US. The SCGE Fund made a $63.5 million investment in 2021.
Here is the note we sent to our LPs in GGFIII regarding FTX. pic.twitter.com/Cgp1Yxk1pz
— Sequoia Capital (@sequoia) November 10, 2022
Galaxy Digital
Galaxy Digital, a publicly-listed firm, stated that it has exposure of approximately $76.8 million of cash and digital assets to FTX and was striving to reduce this by nearly 62%.
Multicoin Capital
Multicoin Capital, a crypto-focused venture capital company, said that it could only save 24% of the assets on FTX by pulling out some of its coins before withdrawals were stopped. Roughly 10% of its total assets are still locked up on FTX.
Galois Capital
Galois Capital, a crypto hedge fund, claims to have $40 million stranded on FTX and is now evaluating its possibilities. In the FTX collapse, the company lost roughly half its assets, which could be close to $100 million.
Crypto hedge fund @Galois_Capital says it has $40 million stuck on @FTX_Official, with the firm now considering its future prospects.@skesslr reportshttps://t.co/bVhaNLkGnU
— CoinDesk (@CoinDesk) November 12, 2022
Paradigm
Paradigm invested a total of $290 million in a group of companies associated with former FTX CEO Sam Bankman-Fried. One of the Paradigm co-founders confirmed that its FTX investment was marked down to zero.
Facts are still coming to light, and there will be many lessons to learn. We feel deep regret for having invested in a founder and company who ultimately did not align with crypto’s values and who have done enormous damage to the ecosystem.
— Matt Huang (@matthuang) November 15, 2022
Lending
Genesis Trading
Genesis Global Capital halted new loan originations and redemptions due to the FTX collapse. The company had assets worth $175 million locked in its FTX trading account.
Hodlnaut
Hodlnaut, a Singapore-based crypto lender, suffered a setback on its road to recovery after it was revealed that it consolidated more than 71% of its assets on centralised exchanges, with SGD 18.4 ($13.3M) million worth of crypto locked on FTX.
Celsius
Celsius said that it held around 3.5 million Serum [SRM] tokens on FTX, the vast majority of which are locked. In addition, it provided Alameda research with $13 million in loans that are now under-collateralized.
We have been closely monitoring the events surrounding FTX and keeping in close communication on these matters with key stakeholders in our cases.
— Celsius (@CelsiusNetwork) November 11, 2022
CEX Platforms
Crypto.com
Crypto.com once disclosed that it was affected for less than 10 million USD. However, its recent actions are causing suspicion throughout the community, making the exchange more subject to scrutiny than ever.
Kraken
Kraken said it only holds about 9,000 FTT tokens on the FTX exchange. In addition, at the request of the authorities, Kraken froze the assets of FTX – Alameda.
🔐 We have no exposure to Alameda Research & we hold about 9,000 FTT tokens on the FTX exchange. We encourage our clients to take back control of their financial freedom by verifying their balances, included in our Proof of Reserve audit.
➡️ Learn more: https://t.co/mnCE9epzlN pic.twitter.com/OT7CZAhdX6
— Kraken Exchange (@krakenfx) November 10, 2022
Huobi
Huobi Global has deposits worth $18.1 million stuck on FTX, consisting of $13.2 million in client deposits and $4.9 million in assets belonging to another subsidiary, Hbit.
Projects
LayerZero
LayerZero, the project by FTX-Alameda in March 2022, announced that it had acquired all ownership of shares, tokens and asset security certificates, cutting off all ties with SBF. LayerZero also acquired Alameda’s entire Stargate (STG) investment.
The project claims to have up to 134 million USD in reserve assets and 11.5 million USD stuck on the FTX exchange, pledging to have still enough money to operate for many years.
🔐 We have no exposure to Alameda Research & we hold about 9,000 FTT tokens on the FTX exchange. We encourage our clients to take back control of their financial freedom by verifying their balances, included in our Proof of Reserve audit.
➡️ Learn more: https://t.co/mnCE9epzlN pic.twitter.com/OT7CZAhdX6
— Kraken Exchange (@krakenfx) November 10, 2022
Star Atlas
The Star Atlas (ATLAS/POLIS) game project on Solana admits to holding up to half of its money reserves on FTX and faces the risk of losing it all but does not disclose specific numbers.
Those Who Did Not Disclose Their Losses
Investment Funds
Mechanism Capital
The trading and venture capital firm manages assets worth hundreds of millions of dollars. A portion of this is stuck in FTX, but the company continues to operate and invest.
Jump Crypto
Jump Crypto has exposure to FTX, but the risk has been controlled, and the fund can still operate normally.
1/ We, like all of you, were shocked by the events that unfolded over the past week. Jump’s exposure to FTX was managed in accordance with our risk framework and we remain well capitalized.
— jump_crypto 🔥💃🏻 (@jump_) November 12, 2022
Temasek
Temasek is a Singaporean investment fund that participated in two funding rounds for FTX and FTX.US in January 2022. It is unclear how much the specific investment is, but the recent market downturn has impacted this fund.
Animoca Brands
The famous investment fund in the game/Web3 segment, Animoca Brands, claimed to be affected by the FTX – Alameda case, but the impact was insignificant.
1/ our thoughts on the #FTX saga tldr; we have minimal exposure and a very strong balance sheet and we need to keep #BUIDL #web3 and celebrate the victories that have enabled #teachers #creators #gamers etc a better life through #digitalownership #NFTs https://t.co/MxKvbXMOId
— Yat Siu (@ysiu) November 11, 2022
Sino Global Capital
Sino Global Capital confirmed the “7-digit” loss but did not disclose the detailed figure. Sino Global is also one of FTX’s Series B funding round investment funds.
Others
Matrixport
The recent failure of crypto exchange FTX has harmed the fixed income offering of crypto services provider Matrixport.
Ren Protocol
Ren, the interchain operability protocol, has seen a 50% decline in TVL over the past week after the FTX demise.
Wintermute
Wintermute, a large crypto trading company, ceased trading and market-making operations on FTX US shortly before FTX halted withdrawals, according to FTX US and Wintermute spokespersons.