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On Tuesday, November 22, in a letter to employees, 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 bank” 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 fall 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 mean for any of this to happen, and I would give anything to be able to go back and do things over again. I did not realize the full extent of the margin position, nor did I realize the magnitude of the risk posed by a hyper-correlated crash”.

The chapter proceedings thus far have revealed a number of the chaotic organizational practices at FTX with deep-rooted issues. The proceedings reveal lax documentation and monetary controls. It additionally exhibits cost requests accredited with simply emojis in chatrooms.

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

Sequoia Apologizes to Investors for FTX

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

In the decision, Roelof Botha, the agency’s international chief, stated that he and his colleagues repent for backing the corporate. Sequoia Capital had invested a complete of $214 million in FTX.com and FTX.us throughout two funds.

Bhushan is a FinTech fanatic and holds a superb aptitude in understanding monetary markets. His curiosity in economics and finance draw his consideration in direction of the brand new rising Blockchain Technology and Cryptocurrency markets. He is repeatedly in a studying course of and retains himself motivated by sharing his acquired information. In free time he reads thriller fictions novels and generally discover his culinary expertise.

The introduced content material might embrace the private opinion of the creator and is topic to market situation. Do your market analysis earlier than investing in cryptocurrencies. The creator or the publication doesn’t maintain any accountability on your private monetary loss.