The implosion of FTX has sent ripples across the cryptocurrency industry. It has decided to commence bankruptcy proceedings in the USA, and its chief executive officer (CEO) Sam Bankman-Fried has resigned. The exchange, established in 2019, is also expected to undergo regulatory scrutiny in the US.
Millions of investors are under the threat of losing their investments due to the fall of FTX. Apart from the direct investors, several other exchanges had kept their holdings in the form of FTX’s tokens, FTT. Their money is also in danger following the fall of the exchange.
Who stands to lose the most from FTX’s fall?
Before the crash, FTX was valued at $32 billion. That money has now gone up the smoke. Out of all the investors, at least two major shareholders have decided to mark their investments down to zero. According to Forbes, these are Sequoia and Paradigm.
These firms have a lot to lose if FTX can’t be saved:
Sequoia Capital
It currently holds a 1.1 per cent stake in FTX. In early 2022, the value of Sequoia’s investment peaked at $350 million. If the money is not recovered, it will become the largest lossmaker among the investors of FTX.
Temasek
The Singapore-based investment company owns a 1 per cent stake in FTX. At the peak of its valuation in early 2022, its stake stood at $320 million. It had originally invested around $205 million in the firm.
Paradigm
Another investment firm, Paradigm, also owns around a 1 per cent stake in the exchange. It originally invested around $215 million, and in early 2022, the value of its stake stood at $315 million. Interestingly, Alameda Research, which Sam Bankman-Fried also owned, had invested $20 million in Paradigm.
Ontario Teachers’ Pension Plan
The plan manages retirement funds of around 3.3 lakh teachers in Canada. It had invested around $95 million in FTX. At the peak of its valuation, the stake was valued at $125 million. Its stake stands at 0.4 per cent.
Apart from these major investors, Tiger Global Management and SoftBank had also invested in the exchange in a series C round in January 2022. However, their stake is unknown.
Also, some individual investors stand to lose big. NFL legend Tom Brady and model Gisele Bundchen owned 0.15 per cent and 0.09 per cent in FTX as of June 2021. It is estimated that before the crash, the value of their investment must have been around $45 million and $25 million, respectively.
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