This Crypto Venture Capital Loses Nearly $1 Billion On FTX, When Will This FTX Fiasco End?

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The collapse of crypto exchange FTX is one of the biggest shocks to hit the industry. The impact of the fall is spreading to different crypto assets and several stock market investors.

The crypto market saw massive bearish performance as asset prices continued to fall. Therefore, the overall value is far below expectations, creating more fears and doubts in crypto.

Following the events and crisis that unfolded, FTX CEO Sam Bankman-Fried (SBF) filed for bankruptcy on the struggling FTX exchange. He also resigned as CEO.

On the side of FTX investors, the story becomes more intense. Several venture capitalists and individuals have started counting the losses following the bankruptcy filing. Additionally, contagion from the collapse of the exchange continues to spread. One such beneficiary of the negative effect is Multicoin Capital.

Multicoin capital exposure to FTX Crypto Exchange

In the new development, a crypto-venture company, Multicoin Capital, disclosed its exposure to FTX. Thursday, the company reported how the fund is down 55% from last month. He revealed to his investors that the drop in performance was due to the collapse of FTX.

The events surrounding FTX have dealt a heavy blow to Multicoin. In July, the company launched its $430 million fund. As the FTX saga unfolded last week, the venture capital firm recovered only a quarter of its assets from the exchange. But, around 15% of its total assets are still trapped on FTX.

Currently, Multicoin Capital plans to reduce its assets on the struggling FTX to zero. He noted that this is the only sensible step to take as the exchange is already deep in bankruptcy proceedings. However, he still believed that he would recover some of his assets from the collapse of the exchange in the future.

At this time, the crypto-business giant has not indicated the amount it is canceling regarding the FTX crisis. But some crypto market experts believe the value would be over $850 million.

Multicoin managing partners Kyle Samani and Tushar Jain responded to the situation by post. They wrote that they trusted their relationship with FTX too much, which allowed them to deposit many assets on the exchange.

Multicoin Capital now uses a mostly autonomous custodian

Previously, Multicoin Capital spread all of its assets across the three major crypto exchanges; Binance, Coinbase and FTX. Following the collapse of FTX, the venture capital firm transferred all of its remaining assets to either self-custody or Coinbase.

FTT price continues to fall l FTUSDT on Tradingview.com

Multicoin said it currently has no assets exposed to counterparties. However, it plans to diversify its custodial exposure by choosing Coinbase as its primary custodian. He noted that he would resume trading with other exchanges once the situation in the market becomes calm.

Moreover, the crypto-venture company believes that the FTX contagion will continue to spread. He mentioned that several trading companies would shut down following the collapse of FTX and its sister trading platform, Alameda Research.

Featured image from Pixabay, chart from TradingView.com

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