(The New York Times) On Friday, FTX, facing a cash shortfall of $8 billion and scrambling to drum up money, filed for bankruptcy. Mr. Bankman-Fried resigned as chief executive. The Justice Department and the Securities and Exchange Commission are examining whether FTX improperly used customer funds to prop up a separate trading firm, Alameda Research, which Mr. Bankman-Fried also founded.
FTX’s list of investors spans powerful and well-known investment firms: NEA, IVP, Iconiq Capital, Third Point Ventures, Tiger Global, Altimeter Capital Management, Lux Capital, Mayfield, Insight Partners, Sequoia Capital, SoftBank, Lightspeed Venture Partners, Ribbit Capital, Temasek Holdings, BlackRock and Thoma Bravo…
Investing in FTX gave them a piece of the hottest start-up in an emerging sector that promised to be as big as smartphone apps or the internet itself. Many investors had trumpeted their support of the deal. Sequoia even published a glowing profile of Mr. Bankman-Fried to its website. Now the deal represents a major black eye.
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