FTX’s Collateral Dropped to $9 Billion from $60 Billion

On Tuesday, November 22, in a letter to workers, FTX founder Sam Bankman-Fried outlined a $51 billion crash within the firm’s collateral which has dropped to $9 billion from $60 billion.

In his letter obtained by Bloomberg, SBF wrote {that a} mixture of sell-offs in cryptocurrencies, a credit score squeeze, and a “run on the financial institution” left the collateral at solely $9 billion forward of the corporate’s submitting for Chapter 11 chapter.

The estimated liabilities by then had reached $8 billion. The autumn within the worth of FTX’s crypto property alone halved the collateral to $30 billion. In a message to staff, FTX chief Sam Bankman-Fried wrote:

“I didn’t imply for any of this to occur, and I might give something to have the ability to return and do issues over once more. I didn’t notice the total extent of the margin place, nor did I notice the magnitude of the danger posed by a hyper-correlated crash”.

The chapter proceedings to this point have revealed a few of the chaotic organizational practices at FTX with deep-rooted issues. The proceedings reveal lax documentation and monetary controls. It additionally reveals fee requests authorized with simply emojis in chatrooms.

Moreover, the corporate used its funds to purchase houses and different private gadgets for workers and advisers. As per some stories, SBF’s mother and father and a few senior workers at FTX bought properties value a staggering $300 million within the Bahamas. In addition to, speculations are additionally ripe that Sam Bankman-Fried has been behind the $600 million hack of the crypto alternate FTX.

Sequoia Apologizes to Traders for FTX

As we all know enterprise capital big Sequoia Capital was one of many greatest traders in FTX. Nonetheless, because the disaster unfolds, high companions on the VC agency apologized to traders throughout a convention name on Tuesday, November 22.

Within the name, Roelof Botha, the agency’s international chief, mentioned that he and his colleagues repent for backing the corporate. Sequoia Capital had invested a complete of $214 million in and throughout two funds.

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