The full value of the investment in FTX is being marked to zero dollars by the venture capital giant.
The investment in FTX's US and global businesses was going to be written down by the VC firm. The letter was posted on the social networking site.
At this time, we don't know the full nature of the risk. We are marking our investment down to $0 based on our current understanding. The investors were reassured that their exposure to FTX was limited.
—Sequoia Capital (@sequoia) November 10, 2022
Taking risk is what we do. Some investments will surprise to the upside while others will surprise to the downside.
After a stunning turn of events on Wednesday which saw FTX being pulled out of plans to be acquired by Binance due to issues beyond our control or ability to help, the company wrote to its investors.
The bizarre sequence of events began over the weekend when Sam Bankman-Fried, the CEO of FTX, and Changpeng "CZ" Zhao, the CEO of Binance, exchanged barbs on social media.
At a time when some smaller exchanges suspended withdrawals to users, a November 2 report from CoinDesk was stoking market fears about FTX.
According to media reports, Bankman-Fried said that a competitor was trying to go after them with false rumors.
A selloff and a rush for withdrawals took place after the damage had been done. According to a message Bankman- Fried sent to staff, $6 billion was withdrawn in 72 hours at FTX.
The two people appeared to have made up. The deal was announced by Bankman-Fried and he said that he intended to acquire FTX.com.
The drama didn't end there, and on Wednesday, the market fell after the company bailing on the acquisition. According to a person with direct knowledge of the matter, Bankman-Fried told investors that FTX needed emergency funding to survive.
Following the announcement that it was walking away from the acquisition of FTX, the price of cryptocurrencies fell. The time was 11.48p.m. Over the last 24 hours, both ether and eth were down by more than 10%
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