The Alaska Permanent Fund is one of the institutional investors that had exposure to the bankrupt cryptocurrency exchange FTX, which filed for bankruptcy on Friday, along with 134 of its associated companies. There will be losses.
The Alaska Permanent Fund’s investments were through Sequoia Capital, headquartered in Menlo Park, Calif., and other venture capital firms. Sequoia sent a letter to its limited partners on Wednesday marking down the value of its investments in FTX to $0.
The Alaska Permanent Fund had committed as much as $200 million to Sequoia’s Global Growth Fund III, according to Pensions and Investments, an online blog. It was that fund that made the investment of up to $214 million of pooled money from various investors into FTX; thus, the Alaska Permanent Fund’s exposure was not the full amount.
Other institutional investors that had money tied up in FTX include the Ontario, Canada Teachers’ Pension Plan, and the Washington State Investment Board. The Ontario Teachers’ Pension Plan had $95 million invested in FTX Trading and FTX US, but reports that the loss will have a limited impact on the plan.
Sequoia Capital removed its glowing profile of FTX founder Sam Bankman-Fried from its website last week and replaced it with a markdown notice.
“A liquidity crunch has created solvency risk for FTX and its future is uncertain. Many have been affected by this unexpected turn of events. For Sequoia, our fiduciary responsibility is to our LPs. To that end, we shared this letter with them today regarding our investment in FTX. For FTX, we believe its fiduciary responsibility is first to its customers, and second to its shareholders. As such, FTX is exploring all opportunities to ensure its customers are able to recover their funds as quickly as possible.“
FTX users could be out as much as $8 billion in losses, after it appears that FTX CEO Sam Bankman-Fried used money from customer accounts to transfer to other accounts and fund risky investments. Those companies include FTX-owned Alameda Research, which owes FTX some $10 billion.
The loss on FTX is offset by the fund’s roughly $7.5 billion realized and unrealized gains, Sequoia said in its letter.
“We are in the business of taking risk. Some investments will surprise to the upside, and some will surprise to the downside. We do not take this responsibility lightly and do extensive research and thorough due diligence on every investment we make,” the letter explained, signed “Team Sequoia.”
“At the time of our investment in FTX, we ran a rigorous due diligence process,” the company said, although that is now in question, since it appears the CEO of FTX was running a Ponzi scheme to fund his political favorites in the Democrat Party.
In 2018, the then-$81 billion Alaska Permanent Fund Corp. committed $200 million to Sequoia’s Global Growth Fund III, and the $161 billion Washington State Investment Board retirement system approved an allocation of up to $350 million, according to Pensions and Investments.
FTX founder and CEO Sam Bankman-Fried resigned Friday as CEO, and about 130 companies affiliated with FTX also began voluntary bankruptcy proceedings, according to FTX’s website.
Those companies that are also embroiled in the bankruptcy include:
1. Alameda Aus Pty Ltd
2. Alameda Global Services Ltd.
3. Alameda Research (Bahamas) Ltd
4. Alameda Research Holdings Inc.
5. Alameda Research KK
6. Alameda Research LLC
7. Alameda Research Ltd
8. Alameda Research Pte Ltd
9. Alameda Research Yankari Ltd
10. Alameda TR Ltd
11. Alameda TR Systems S. de R. L.
12. Allston Way Ltd
13. Altalix Ltd
14. Analisya Pte Ltd
15. Atlantis Technology Ltd.
21. Bancroft Way Ltd
28. Bitvo, Inc.
29. Blockfolio Holdings, Inc.
30. Blockfolio, Inc.
31. Blue Ridge Ltd
37. BTLS Limited Tanzania
38. Cardinal Ventures Ltd
39. Cedar Bay Ltd
40. Cedar Grove Technology Services, Ltd
41. Clifton Bay Investments LLC
42. Clifton Bay Investments Ltd
43. CM-Equity AG
44. Corner Stone Staffing
45. Cottonwood Grove Ltd
46. Cottonwood Technologies Ltd.
47. Crypto Bahamas LLC
48. DAAG Trading, DMCC
49. Deck Technologies Holdings LLC
50. Deck Technologies Inc.
51. Deep Creek Ltd
52. Digital Custody Inc.
53. Euclid Way Ltd
60. FTX (Gibraltar) Ltd
61. FTX Canada Inc
62. FTX Certificates GmbH
63. FTX Crypto Services Ltd.
64. FTX Digital Assets LLC
65. FTX Digital Holdings (Singapore) Pte Ltd
66. FTX EMEA Ltd.
67. FTX Equity Record Holdings Ltd
68. FTX Europe AG
69. FTX Exchange FZE
70. FTX Hong Kong Ltd
71. FTX Japan Holdings K.K.
72. FTX Japan K.K.
73. FTX Japan Services KK
74. FTX Lend Inc.
75. FTX Marketplace, Inc.
76. FTX Products (Singapore) Pte Ltd
77. FTX Property Holdings Ltd
78. FTX Services Solutions Ltd.
79. FTX Structured Products AG
80. FTX Switzerland GmbH
81. FTX Trading GmbH
82. FTX Trading Ltd
83. FTX TURKEY TEKNOLOJİ VE TİCARET ANONİM ŞİRKET
84. FTX US Derivatives LLC
85. FTX US Services, Inc.
86. FTX US Trading, Inc
87. FTX Vault Trust Company
88. FTX Ventures Ltd
89. FTX Ventures Partnership
90. FTX Zuma Ltd
91. GG Trading Terminal Ltd
92. Global Compass Dynamics Ltd.
93. Good Luck Games, LLC
94. Goodman Investments Ltd.
95. Hannam Group Inc
96. Hawaii Digital Assets Inc.
97. Hilltop Technology Services LLC
98. Hive Empire Trading Pty Ltd
99. Innovatia Ltd
100. Island Bay Ventures Inc
101. K-DNA Financial Services Ltd
102. Killarney Lake Investments Ltd
103. Ledger Holdings Inc.
104. LedgerPrime Bitcoin Yield Enhancement Fund, LLC
105. LedgerPrime Bitcoin Yield Enhancement Master Fund LP
106. LedgerPrime Digital Asset Opportunities Fund, LLC
107. LedgerPrime Digital Asset Opportunities Master Fund LP
108. Ledger Prime LLC
109. LedgerPrime Ventures, LP
110. Liquid Financial USA Inc.
111. LiquidEX LLC
112. Liquid Securities Singapore Pte Ltd
113. LT Baskets Ltd.
114. Maclaurin Investments Ltd.
115. Mangrove Cay Ltd
116. North Dimension Inc
117. North Dimension Ltd
118. North Wireless Dimension Inc
119. Paper Bird Inc
120. Pioneer Street Inc.
121. Quoine India Pte Ltd
122. Quoine Pte Ltd
123. Quoine Vietnam Co. Ltd
124. SNG INVESTMENTS YATIRIM VE DANIŞMANLIK ANONİM ŞİRKETİ
125. Strategy Ark Collective Ltd.
126. Technology Services Bahamas Limited
127. Tigetwit Ltd
129. Verdant Canyon Capital LLC
130. West Innovative Barista Ltd.
131. West Realm Shires Financial Services Inc.
132. West Realm Shires Services Inc.
133. Western Concord Enterprises Ltd.
134. Zubr Exchange Ltd
In July, Sam Bankman-Fried said he and FTX had a “few billion” on hand to shore up struggling crypto firms to prevent the collapse of the digital currency industry, and at the time he said the worst of the sector’s liquidity problem had likely passed.
Bankman-Fried, who lives in the Bahamas, and FTX, which is a company registered in the Bahamas, are now being investigated by as many as five U.S. regulatory entities, including the Securities and Exchange Commission, the Department of Justice, the Commodity Futures Trading Commission, the Texas State Securities Board, and California’s Department of Financial Protection and Innovation, according to decrypt.co.