Venture capital giant Sequoia Capital is to write down its $214 million investment in struggling cryptocurrency exchange FTX to zero, according to a report by Fortune. The report cites a note sent to investors as saying that the investment would be written off completely after a liquidity crunch “created a solvency risk for FTV”.
Venture capital giant Sequoia Capital is to write down its $214 million investment in struggling cryptocurrency exchange FTX to zero, according to a report by Fortune.
The report cites a note sent to investors by Sequoia as saying that the investment would be written off completely after a recent liquidity crunch “created a solvency risk for FTV”.
The VC firm invested in FTX back in July 2021 when the company was valued at $18 billion with that figure jumping to $32 billion earlier this year before the current liquidity problems arose. On Tuesday of this week, rival crypto exchange Binance said it was planning to acquire FTX, but backed out of the deal just a day later saying that the company’s issue are “beyond our control or ability to help”.
FTX had approached Binance for help after a barrage of customer withdrawal requests started over the weekend, many of them prompted by a tweet from Binance’s CEO that he was dumping FTX-linked coins. Cryptocurrency prices fell amid concerns about its solvency and fears of a possible contagion.
