Sequoia Capital Writes Off $210 Million FTX Investment Amid Collapse
Sequoia Capital officially marks its $210 million FTX investment down to zero and alerts limited partners about the total loss. The firm publicly shares its letter to distance itself from the cryptocurrency exchange's sudden financial calamity.
Sequoia Capital officially writes off its roughly $210 million investment in FTX, reducing the value of its stake to absolute zero. The venture firm alerts its limited partners about the total loss in a letter, noting that the cryptocurrency exchange experiences a catastrophic collapse after reaching a breathtaking $32 billion valuation earlier this year.
FTX faces an estimated $8 billion shortfall as withdrawal requests overwhelm the platform, prompting founder Sam Bankman-Fried to seek emergency funding. The crisis begins after CoinDesk reveals financial ties between FTX and sister trading house Alameda Research, prompting rival Binance to announce a massive sell-off of FTT tokens.
In a highly unusual move, Sequoia publicly posts its letter to limited partners on Twitter to clearly distance itself from the unfolding disaster. Other major FTX backers, including BlackRock, Tiger Global, and Paradigm, are expected to follow suit and write down their own stakes to zero as the extent of the calamity becomes clear.