The FTX infection is wide and spreading fast. For example, a cryptocurrency startup is estimated to have lost close to a billion dollars in FTX. In addition, there are other cryptocurrency platforms that are directly or indirectly affected.
Cryptocurrency giant has serious losses from FTX collapse
cryptocoin.comAs you can see from , the effects of the FTX collapse continue to expand. Crypto startup giant Multicoin Capital told its investors on Thursday, November 17, that the collapse of FTX had dropped the fund by a staggering 55% compared to last month. Multicoin believes there is a possibility of repurchasing some of its assets from FTX in the future. However, as FTX is currently filing for bankruptcy, Multicoin Capital prefers to reduce them to zero.
The crypto venture firm did not specify exactly how much loss it had incurred due to the FTX collapse. However, market experts estimate that this could exceed $850 million. Multicoin managing partners Kyle Samani and Tushar Jain wrote:
We totally place too much trust in our relationship with FTX. We had too many assets in FTX.
This was a huge blow to Multicoin, which recently launched its $430 million fund in July. As the FTX crash unraveled last week, the firm managed to take about a quarter of its assets off the stock market. However, he still owns about 15% of the fund’s assets on FTX. Multicoin Capital had distributed all its funds to three exchanges, including Binance, FTX and Coinbase. Now, the crypto venture fund holds 100% of its remaining assets in Coinbase or under its own custody.
Jump Crypto is also among the FTX losers
Jump Crypto, a division of Jump Trading Group, has denied rumors circulating online that it plans to cease operations due to incurring FTX losses.
The company announced on November 17 that “Jump Crypto is not shutting down. We believe we are one of the best capitalized and liquid firms in crypto.” He also added that he is still in the ‘investment and trade’ business.
The crypto company expressed its shock at the events with FTX in a tweet on November 12. He told clients that their investments in FTX were managed in accordance with their risk framework. He also assured them that their capital was in good standing.
Cryptocurrency lender Vauld loses $10M in FTX
Funds from Asia’s leading crypto lender Vauld are now stuck with the bankrupt crypto exchange FTX. The risk is expected to be worth about $10 million. Also, due to the ongoing FTX crisis, officials at Vauld are stuck with almost zero liquidity. Vauld, among other crypto exchanges, did not have its own order book. That’s why he aggressively used FTX to execute trades for his clients. Meanwhile, Vauld has close to one million active users, predominantly from Asian markets.
Meanwhile, in August 2022, the Enforcement Directorate of India (ED) found that a Vauld client was involved in a high-level money laundering case. Therefore, it froze assets worth $46 million. Vauld was given another loan protection extension last week. Now he has until January 20 to resolve his financial problems. However, the business is free to request another extension if necessary.
Silvergate shares continue to fall
Traders seem to anticipate that Silvergate will be significantly impacted by the collapse of FTX. Silvergate Capital (SI) shares fell Friday morning in a sign that FTX’s rapid collapse continues to shake investors. On Thursday, Silvergate CEO Alan Lane tried to convince investors that the market volatility fueled by the collapse of FTX will not affect the crypto banker’s business. Alan Lane made the following statement:
Suffice it to say that we have the liquidity and capital ratios to support volatility, whether deposits rise or fall.
However, the company’s stock price fell almost 10% on Friday. So his message seems to disagree. More generally, Silvergate Capital’s shares are down 85% since last year’s crypto bull run.
Hours after Lane’s remarks, cryptocurrency broker FalconX announced that it will not be using Silvergate SEN Leverage, which allows institutional investors to trade any assets on the platform with leverage collateralized in Bitcoin or US dollars “due to too much caution.” It will also not use the crypto banker to make wire transfers.
Last Friday, Silvergate announced that it has no outstanding loans or investments in FTX. He explained that FTX is not the custodian of any of its Bitcoin-backed SEN Leverage loans. FTX has at least $1 billion in deposits with Silvergate. However, the bank says this represents less than 10% of the total deposits it receives from all digital asset clients.
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