The meltdown has also caused a domino effect, with serious consequences for enterprises exposed to the troubled exchange. Here's a short rundown of the companies impacted by FTX's abrupt demise, as well as the level of their exposure to the troubled cryptocurrency exchange.
As a result of the FTX disaster, some businesses have suspended withdrawals.
With FTX suspending withdrawals, companies that invested in the exchange no longer have access to their cash and are now suffering liquidity concerns. For example, BlockFi was one of the first sites to suspend withdrawals following the FTX meltdown. Following the Terra crash earlier this year, the lending institution faced insolvency.
FTX, on the other hand, stepped in and supplied BlockFi with a $400 million revolving credit line. However, with FTX currently in the doldrums, BlockFi was obliged to halt withdrawals on November 11 and may face insolvency once more. To decrease operational expenses, the company is also exploring employment cutbacks.
Firms with money invested in FTX
Following the FTX meltdown, several crypto lenders and exchanges were compelled to halt withdrawals. However, there is an even longer list of companies whose funds are locked on the insolvent exchange. For example, Coinbase, one of the world's major crypto exchanges, stated on November 8 that it had around $15 million in deposits on the exchange.
Galaxy Holdings presented its third-quarter results report on November 9, the same day that FTX ceased withdrawals. According to the statement, Galaxy had more than $76 million in FTX exposure, $47.5 million of which was "in the withdrawal process" at the time. However, it is unclear how much money is still stranded on the exchange and how much money was recovered.
FTX investment is written off by venture capital companies.
All exposures pale in comparison to the damages that VC companies may incur if FTX cannot be salvaged. Sequoia Capital, for example, invested almost $215 million in FTX's worldwide and US operations. However, following the crypto exchange's meltdown, Sequoia has reduced its holding to $0. Similarly, Temasek Holdings, a Singaporean venture capital firm, said that it will write down its $275 million stake in FTX.com regardless of the exchange's bankruptcy procedures.
The bankruptcy of FTX has sent shockwaves throughout the crypto ecosystem, affecting hundreds of organisations worldwide that were partners with FTX and its sister-firm Alameda Research. The consequences of the FTX accident are not fully known because the effects will be noticed for some time.