FTX and Alameda’s massive investments will take a long time to unwind from crypto industry | TechCrunch (2024)

Reading the spreadsheet detailing the investment portfolio of Alameda Research, the investment arm of fallen crypto exchange FTX, you wonder how they had time to do anything other than invest given the sheer number of deals recorded. Perhaps that was part of the problem.

FTX and its sister company (or parent company, depending on how you look at it) Alameda had their hands in a bunch of different startups. The depth of its roster wasn’t very transparent until now.

A spreadsheet first shared by the Financial Times showed Alameda’s private equity portfolio, with some FTX positions included. The document includes just shy of 500 investments across 10 holding companies for a total of $5.276 billion. (Like the Financial Times, TechCrunch has yet to confirm all data shared in the spreadsheet, meaning that when we discuss aggregates, we’re speaking directionally. We reached out to FTX and its founder, Sam Bankman-Fried, for comment but haven’t heard back.)

This spreadsheet, dated from early November, raises a number of concerns surrounding the extent to which FTX and Alameda — and their affiliated companies — invested in the crypto industry.

“I scratched my head at the FTX investments/acquisitions (i.e. Dave Inc/Storybook) last year and thought maybe SBF (as a genius) saw the market differently, and maybe I was losing my touch,” Vance Spencer, co-founder of Framework Ventures, tweeted on Tuesday. “Looking at it all together in 2022: nope, they were idiots, they lit all the money on fire.”

One of the biggest investments saw a total of $1.15 billion poured into crypto mining firm Genesis Digital Assets. (This is not related to Genesis Trading, which froze its lending unit amid the FTX collapse.) The capital arrived in several tranches, per the sheet. It’s unclear why Alameda poured that much money into a crypto mining business, though it’s tough times for miners: They continue to feel pressure as cryptocurrency prices remain low and energy prices rise.

While many listed funding rounds had been previously announced, the extent of the investments had never before been aggregated in one place for the public eye. The resulting recording is a hodgepodge of deals, sizes and types concerning mainly crypto entities but also some traditional financial institutions, publishers, betting platforms and funds. Anthony Scaramucci’s investment firm Skybridge Capital, for example, is on the list; the firm has been trying to buy back its 30% stake since FTX collapsed.

Many valuations are represented in the spreadsheet tower: Some 23 companies listed as venture investments by Alameda, FTX and six other subsidiaries had unicorn valuations at the time of investment, meaning that they were worth $1 billion or more. How those valuations have held up since, and whether any have been written down, is not immediately clear.

The sheet indicates that FTX Ventures put $50 million into Yuga Labs, the company behind Bored Ape NFTs, at a $4 billion valuation. Alameda Ventures (under the name Maclaurin Investments) put $10 million into Circle at a $3.5 billion price tag. That deal might have looked good when Circle was set to go public in a SPAC combination that would value it at $9 billion. However, we learned this week that Circle’s blank-check combination was scrapped.

Around 60 of the listed deals are in companies worth $100 million or more. Around 80 are in companies worth $50 million or more. Those numbers would rise if we had valuation entries for all listed investments, which we do not.

The spreadsheet also lists investments into funds and other corporate entities; the FTX-Alameda crew was busy in many forms of deal-making, from putting a listed, combined $200 million into two Sequoia funds to equity tokens, SAFEs and straight-up token buys.

Given the sheer volume of the deals listed in this spreadsheet, it appears that a sizable portion of the crypto boom was predicated at least partially on FTX-derived capital. While it would be simple at this juncture to say that FTX was hyping its own supply, it’s worth noting that other venture players have taken similarly aggressive postures. Andreessen Horowitz, for example, is a leading investor in web3 companies and is active in lobbying for favorable regulation for the crypto space, similar to FTX and SBF. Capital in the crypto space is often doing a little bit more than just buying shares.

What happens to the listed stakes is not yet clear. Robinhood, in which Bankman-Fried bought a material stake, recently said that it is not sure what will happen to that chunk of its equity. For the startups present on the list, entities swimming in less liquid waters, the issues could prove thornier.

The FTX implosion is still shrouded in confusing, conflicting claims. Bankman-Fried is adamant that it was all a big whoops, while many in the larger crypto community appear prepared to accept little less than his legal defenestration. We’ll see. But what the spreadsheet makes plain is just how deep FTX’s roots in the crypto industry were.

FTX and Alameda’s massive investments will take a long time to unwind from crypto industry | TechCrunch (2024)

FAQs

Did FTX crash the crypto market? ›

Crypto exchange FTX crashed in November 2022, sinking major tokens in its wake.

What happens to my crypto in FTX? ›

FTX will return money to most customers less than 2 years after catastrophic crypto collapse. FTX says that nearly all of its customers will receive the money back that they are owed, two years after the cryptocurrency exchange imploded, and some will get more than that.

How did FTX affect the crypto industry? ›

At the time, FTX was the third-largest crypto exchange, widely regarded as one of the prime players in the space. Its sudden collapse not only shocked the market but also shook the very foundation of the crypto industry, revealing major vulnerabilities in what investors perceived as a promising and robust ecosystem.

How will the FTX case affect the future of cryptocurrency? ›

Crypto companies and exchanges are leaning toward more regulation in the wake of the FTX fraud as both a form of legitimacy and a way to gain trust with investors surrounding digital assets, according to MacGregor.

Did FTX investors lose all their money? ›

At Bankman-Fried's sentencing hearing, Kaplan agreed. He said FTX's customers had lost some $8bn and that its investors had lost $1.7bn.

Will I ever get my money back from FTX? ›

Almost all customers of collapsed cryptocurrency exchange FTX will get their money back — and more, according to a court filing. FTX estimates that it owes creditors around $11.2 billion, according to a reorganization plan published late Tuesday.

Did FTX pay everyone back? ›

FTX now says that 98% of its creditors, including individual investors who had US$50,000 or less with FTX, will receive the funds they lost.

What did Alameda do? ›

Alameda Research played a significant role in the growth of FTX, as it acted as FTX's main market maker. As a market maker, Alameda Research was available to buy and sell if other customers wanted to, sometimes taking the losing side of a trade to attract customers to the exchange.

Why did Alameda research fail? ›

A report published in The Wall Street Journal citing former employees revealed that Alameda incurred heavy losses from its trading algorithm. The algorithm was designed to make a large number of automated and fast trades. However, the firm was losing money by guessing the wrong way about price movements.

What triggered FTX collapse? ›

FTX crashed due to mismanagement of funds, lack of liquidity and the large volume of withdrawals. Binance announced it would buy FTX to prevent a larger market crash, but quickly bailed out of the deal as more news reports of mishandled customer funds surfaced.

Where did FTX money go? ›

FTX founder Sam Bankman-Fried and senior staff spent customer funds on technology investments, luxury real estate and political contributions, among other things. The missing funds are at the heart of Bankman-Fried's criminal trial, which kicked off in Manhattan federal court this week.

Is it safe to keep crypto on FTX? ›

In the end, however, it seems FTX was not all that it appeared and had not been keeping its promises to its customers, says Fraser. This includes promises to not lend out customer deposits and that customer assets were safe with FTX. “Clearly that was not the case. Assets were not safe.

How did FTX collapse affect the economy? ›

The collapse of FTX has affected confidence in other cryptocurrency exchanges and cryptoassets, however systemic market participants appear to have little or no exposure to the exchange and consequently the impact on the financial system appears limited.

Which world's biggest crypto firm is melting down? ›

Under threat of enforcement actions by U.S. agencies, Binance's empire is quaking. Over the past three months, more than a dozen senior executives have left, and the exchange has laid off at least 1,500 employees this year to cut costs and prepare for a decline in business.

What caused the collapse of FTX crypto? ›

FTX crashed due to mismanagement of funds, lack of liquidity and the large volume of withdrawals. Binance announced it would buy FTX to prevent a larger market crash, but quickly bailed out of the deal as more news reports of mishandled customer funds surfaced.

Did FTX customers get their money back? ›

FTX founder Sam Bankman-Fried, left, arrives at a federal courthouse in Manhattan on Feb. 16, 2023. Nearly all customers of FTX will get their money back, plus interest, after the cryptocurrency exchange imploded 17 months ago.

Top Articles
Latest Posts
Recommended Articles
Article information

Author: Jerrold Considine

Last Updated:

Views: 5301

Rating: 4.8 / 5 (78 voted)

Reviews: 85% of readers found this page helpful

Author information

Name: Jerrold Considine

Birthday: 1993-11-03

Address: Suite 447 3463 Marybelle Circles, New Marlin, AL 20765

Phone: +5816749283868

Job: Sales Executive

Hobby: Air sports, Sand art, Electronics, LARPing, Baseball, Book restoration, Puzzles

Introduction: My name is Jerrold Considine, I am a combative, cheerful, encouraging, happy, enthusiastic, funny, kind person who loves writing and wants to share my knowledge and understanding with you.