An initial assessment of the damage to the crypto world

Crypto exchange FTX’s rapid collapse with the bankruptcy filing on Friday, which came as a surprise to many, has huge implications for the crypto market and for the investors who depend on Sam Bankman-Fried’s company. A new document filed with the US authorities by the newly installed CEO of the bankruptcy proceedings, John J. Ray III, now shows for the first time how many users are affected.

The document mentions that there may be more than a million believers. Already on Friday, when the bankruptcy proceedings were initiated, it was announced that the damage may amount to a rough estimate of more than ten billion dollars. There is nothing more concrete at the moment, as Ray and a number of newly appointed directors first have to get an idea of ​​the situation and at the same time have to deal with dozens of regulatory authorities and a hack attack on FTX systems. A list of the top 50 creditors must be submitted by 18 November at the latest.

130 companies in the network

In addition, the FTX collapse comes as a surprise to many. “A little over a week ago, under the leadership of its co-founder Sam Bankman-Fried, FTX was considered one of the most respected and innovative companies in the crypto industry,” the document reads. But the handling of user deposits and the FTX token has torn a billion-dollar financial hole in the company, which within a few years has built a corporate network of more than 130 companies in numerous countries.

FTX collapse has already cost the crypto market $250 billion

Top investors hang out inside

It is already known that large investors who made financing rounds with FTX wrote off their investments. In early 2022, they valued FTX at an incredible $32 billion. These include:

  • paradigm: $278 million written off
  • Sequoia Capital: $214 million written off
  • soft bank: $100 million written off
  • Ontario Teacher’s Pension Plan (OTPP): $75 million written off

NEA, IVP, Iconiq Capital, Third Point Ventures, Tiger Global, Altimeter Capital Management, Lux Capital, Mayfield, Insight Partners, Lightspeed Venture Partners, Ribbit Capital, Temasek Holdings, BlackRock, Coinbase Ventures and Thoma Bravo are also invested, likely to have to write off their investments. In total, about 80 venture capitalists have put about $2 billion into FTX over the years.

Crypto funds no longer have access to assets

Besides retail customers, there are also institutional investors with their hedge funds who use the crypto exchange to store and trade their crypto assets. This means that they cannot or only partially access their BTC, ETH and Co, which are held on FTX. These include:

  • Coin shares: 30.3 million dollars
  • Galaxy Digital: 77 million dollars
  • Genesis trade: 175 million dollars
  • Pantera capital
  • liquid meta
  • Multicoin capital
  • winter mute
  • Too bad Global
  • Galois capital

Overall, according to Crypto Fund Research, 25 to 40 percent of all funds focused on crypto assets are affected by the FTX crash. Between 7 and 12 percent of their assets under management (AUM) are said to be stuck on FTX or may be long gone. “When the dust settles, we expect losses for crypto hedge funds and crypto venture funds directly impacted by the FTX collapse to be well over $1 billion and potentially as high as $5 billion Crypto Fund Research CEO Josh Gnaizda told Blockworks .

On top of that, there is the overall state of the crypto market itself. As reported, since the start of the FTX collapse, around $250 billion in market capitalization has been wiped out by falling prices.

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