Crypto funds’ losses from FTX’s bankruptcy could reach up to $5 billion, according to Blockworks, citing Crypto Fund Research.
— Crypto Fund Research (@CryptoFResearch) November 15, 2022
According to experts, the crisis affected 25-40% of sector investment vehicles that had invested in FTX or its utility token FTT.
Crypto Fund Research CEO Josh Gnaizda clarified that this refers to 7-12% of assets under management.
“As clarity emerges, losses for hedge funds and venture firms directly tied to the FTX collapse are expected to exceed $1 billion at best, and could reach as much as $5 billion,” he said.
Industry insiders, speaking on condition of anonymity, told the publication that losses among asset managers could be even larger.
“The number of completely [destroyed] funds by this [bankruptcy] is only beginning to surface,” one source noted.
Crypto Fund Research receives monthly reports on the activities of more than 100 industry investment structures.
Paradigm and Sequoia Capital reported that potential losses from the FTX crisis could amount to $278 million and $213 million, respectively.
Genesis Trading said that the derivatives unit had about $175 million blocked in its account on the platform.
As part of our goal in providing transparency around this week’s market events, the Genesis derivatives business currently has ~$175M in locked funds in our FTX trading account. This does not impact our market-making activities.
— Genesis (@GenesisTrading) November 10, 2022
As of November 8, Galaxy Digital, Mike Novogratz’s firm, had FTX-related positions in cash and digital assets amounting to $76.8 million. Of these, $47.5 million were in the process of being withdrawn, the firm said in its third-quarter results.
Multicoin Capital told The Block that it had invested $25 million in FTX US and held $2 million in USDC on the exchange.
The venture firm invested in FTX US through a created in July Venture Fund III for $430 million. Investments in the failed platform amount to 5.8% of the fund’s assets, according to Multicoin.
Crypto Fund Research estimated Pantera Capital’s FTX-related assets at about $100 million. The firm did not confirm the data but previously stated that the exchange’s collapse insignificantly affected Pantera’s business.
Researchers expect a record number of investor requests to retrieve funds from crypto funds in November — up to $2 billion. The previous high — $1.3 billion — was recorded by Crypto Fund Research in June after the Terra collapse.
Bloomberg were skeptical about the possibility of investors and clients of FTX recovering their losses.
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