Sam Bankman-Fried’s enterprise empire contains billions of {dollars} of illiquid enterprise capital investments, in keeping with inner information seen by the Monetary Occasions, together with publicity to Elon Musk’s SpaceX and Boring Firm.
The extent of the fallen crypto mogul’s non-public belongings underscore the unsure restoration dealing with clients of his collapsed FTX alternate.
The 30-year-old entrepreneur, as soon as a star of the crypto trade, on Friday positioned FTX worldwide, its unbiased US arm, and his proprietary buying and selling agency Alameda Analysis right into a joint chapter course of in Delaware federal court docket.
Preliminary filings listed each belongings and liabilities of the group at between $10bn and $50bn. FTX’s new chief govt John Ray, who was introduced in to chair Enron throughout its liquidation, stated the businesses had “helpful belongings” and that the chapter would maximise recoveries.
The sprawling enterprise capital portfolio will add to the complexity of the insolvency proceedings, which itself contains greater than 130 firms managed by Bankman-Fried. FTX’s collapse is among the many most dramatic failures within the crypto trade not simply this 12 months, however because the creation of bitcoin greater than a decade in the past.
FTX and its associates haven’t but disclosed the precise dimension of their liabilities and belongings, and the shortfall that possible exists. FTX’s not too long ago departed head of institutional gross sales, Zane Tackett, stated on Twitter on Friday that the shortfall bumped into billions of {dollars}. FTX didn’t instantly reply to a request for remark.
Any hole between belongings and liabilities will probably be influenced by the worth that may be recovered from $5.4bn that FTX and Alameda invested in virtually 500 crypto firms and enterprise capital funds, in keeping with the information seen by the FT.
The most important of these investments is $1.15bn that Alameda ploughed into crypto mining group Genesis Digital Belongings between August 2021 and April 2022, the information present.
Publicly traded mining companies have bought off sharply over the previous 12 months because the crypto market has declined. The HashRate crypto mining index, which tracks such shares, is down 75 per cent since August 2021.
Genesis stated that regardless of market situations it “stays worthwhile, debt free, and our enlargement plans to proceed”. It added it was circuitously affected by FTX and Alameda’s collapse.
The information additionally checklist greater than $1bn invested throughout about 40 funds run by enterprise capital corporations, together with some that had been traders in FTX similar to Sequoia Capital. These holdings embody a $300mn funding by Alameda in K5 World, the agency run by Michael Kives. The funding quantities to 30 per cent of K5’s common partnership, and $225mn of the overall sits in Elon Musk’s SpaceX and Boring Firm, and different unidentified companies, in keeping with the information. Musk has been contacted for remark.
Earlier this 12 months, texts launched throughout Musk’s litigation with Twitter confirmed Kives suggesting Bankman-Fried as a co-investor within the social media firm. Musk was dismissive of the FTX founder and in the end took cash from the top of rival alternate Binance, Changpeng Zhao.
Different huge bets detailed within the information embody a $500mn funding in Anthropic, a man-made intelligence “security and analysis firm”, made by Bankman-Fried via Alameda earlier this 12 months. Anthropic declined to remark.
