Sequoia Capital Apologizes To Fund Investors Over $150M Loss After FTX Exposure
As more crypto-related businesses continue to feel the heat of the FTX collapse, a venture capital firm, Sequoia Capital, has apologized to its fund investors after losing $150 million on the troubled FTX exchange.
Venture Capital Seeks Investor’s Cooperation
According to a Wall Street Journal report citing insider sources, the American venture capital firm is reported to have called all its fund investors to apologize for its exposure with the now-collapsed crypto exchange.
In addition, the company promised to carry out due diligence on its future investment plans. A partner at the venture capital firm stated, “the company will, in the future, have its financial statements audited by some of the world’s Big Four accounting platforms.”
For emphasis, the “Big Four” is the world’s most prominent professional auditing firm. They provide an unbiased and accurate forensic examination of a company’s account balance sheets.
They are Ernst & Young, Deloitte, KPMG, and PwC. However, due to the liquidity crisis surrounding the FTX Group, Sequoia has decided to write off its entire investment.
Although the chances of Sequoia getting compensated for its losses are slim, considering the massive cash shortfall the troubled exchange is currently facing.
FTX has struggled to fulfill the withdrawal requests of users after news broke of its liquidity crisis. Meanwhile, Sequoia’s forgotten investment is among the largest to be written off by a venture firm.
The report stressed that this is after the company sidesteps the traditional corporate systems of control in dealing with FTX. However, the venture capital company partners believe Sequoia has done its due diligence before investing with FTX.
The partners believed that FTX had misled the company and other investors, as shown by its recent bankruptcy filings.
An Unusual Call
Sources close to the matter disclosed that Sequoia’s Tuesday call to fund investors was a rare move by the company. This is because the venture capital firm only addresses its entire investor base via periodic updates, not one-on-one conference calls.
Earlier this month, Sequoia stated that its investors’ funds stuck with FTX were worth $7.5 billion. It said this amount consisted of real and paper gains. However, it also clarified that the FTX exposure accounted for under 3% of its committed capital.
Tokenhell produces content exposure for over 5,000 crypto companies and you can be one of them too! Contact at info@tokenhell.com if you have any questions. Cryptocurrencies are highly volatile, conduct your own research before making any investment decisions. Some of the posts on this website are guest posts or paid posts that are not written by Tokenhell authors (namely Crypto Cable , Sponsored Articles and Press Release content) and the views expressed in these types of posts do not reflect the views of this website. Tokenhell is not responsible for the content, accuracy, quality, advertising, products or any other content or banners (ad space) posted on the site. Read full terms and conditions / disclaimer.
