According to two people close to the subject cryptocurrency investment firm Paradigm has told its limited partners that it has cut its investment in the stock market group FTX to zero after the liquidity collapse.
Led by former Sequoia investor Matt Huang and Coinbase co-founder Fred Ehrsam, the firm supported FTX and its subsidiary FTX US.
Paradigm Invested $290 Million In FTX Over The Past Period
Similar to Sequoia, which supports FTX, Paradigm told investors that it has cut its investment to zero.
The company had invested $290 million in the group of companies affiliated with Sam Bankman-Fried. Paradigm told investors that despite its investment, it is not a client of FTX and the firm does not invest in any way in crypto assets.
Paradigm has become one of the most active investors in the crypto market, announcing the launch of a $2.5 billion fund last year. Known for its academic-based work in decentralized finance investments, the company has supported companies such as DeFi wallet Argent, decentralized exchange dYdX and Gauntlet.
It has also supported financial services companies such as Ken Griffin’s Citadel Securities, one of the world’s largest market makers.
Sam Bankman-Fried’s cryptocurrency exchange FTX has filed for Chapter 11 bankruptcy protection in the US, according to a company statement posted on Twitter.
Bankman-Fried also stepped down as CEO and was replaced by John J. Ray III.
Nearly 130 other subsidiaries are part of the bankruptcy case, including Bankman-Fried’s crypto trading firm Alameda Research and the company’s US subsidiary, FTX.us.
*Not investment advice.
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