VC Sequoia Capital upsets FTX

Sequoia Capital loses its confidence in FTX resulting in its FTX investments to zero.
The Venture Capital firm has sent a letter to its LP.
FTX on a continuous downfall.

Current Stats

Venture Capital firm Sequoia Capital tweeted recently, disclosing the fact that they have marked investments from $214 million to zero in FTX and FTX US in doubt of fishy odor. They have lost confidence in the crypto exchange.

The revenue of FTX had rocketed to more than 1000% from $89 million to approx $1.02 billion.Also, the company’s financial statements clearly mentions an increase in operating income soaring from $14 million to $272 million representing all together an increase of 1,842.9% in 2021.

As per the reports, Sequoia Capital has been involved in 24 crypto deals till date. Among 5 major deals that they were involved in 2022, the massive funding was laid to crypto finance firm Amber Group of $200 million.

According to the Fireblocks official website, on 27 June 2021, the blockchain platform has raised $310 million as a part of Series D funding, co-led by Sequoia Capital, Stripes, DRW VC, SVB Capital and Caotue.

Also, prominent decentralized blockchain network, Iron Fish, in order to achieve the objective to create a coin as private as cash, has raised $27.7 million in a Series A funding round. It was co-invested by Sequoia Capital, Electric Capital, Arrington XRP, Terra co-founder Do Kwon and Anchorage co-founder Nathan MacCauley.

What Next?

In a letter sent to its Limited Partner (LP), Sequoia Capital Fundraising, they started with the focal point- “We are reaching out to share an update on our investment in FTX. In recent days, a liquidity crunch has created solvency risk for FTX. The full nature and extent of this risk is not known at this time. Based on our current understanding, we are marking our investment down to $0.”

Recently, on Wednesday, FTX token value fall on the face by 75%. As per previous week’s reports revealed that Alameda Research, a leading trading firm was founded by Sam Bankman-Fried. He owns almost one-third of assets of its own FTX’s FTT token. Due to which probability to manipulate the markets is more, that will result in havoc.

Competitive firm accept that they may acquire the crypto exchange. The media highlighted it at such a time, when Alameda Research and FTX were facing a “liquidity crunch”. But SBF denied any kind of takeover and stated that the firm is running at a smooth pace. He claims those as rumors.

Recently, apart from FTX token, other crypto are on the downside. As per data states, Dogecoin value has fallen to 20%. Solana token has plunged to 17%. Whereas Ethereum, Polygon and XRP have collapsed to 15%.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing