Analysts Investigate SoftBank’s Exposure To Crypto Exchange FTX

On November 10, CEO Sam Bankman-Fried announced his cryptocurrency exchange FTX needs to file for bankruptcy due to an $8 billion capital shortfall. Since then, analysts have jumped on an investigation to figure out SoftBank’s exposure to FTX.

Soon after Sam Bankman-Fried shared with FTX.com investors that the company would need to file for bankruptcy without a cash injection, the primary backer Sequoia Capital published a statement announcing that its exposure to FTX was limited and the venture capital have decided to mark down its $210 million investment to $0.

However, SoftBank has not released any such assurance. Masayoshi Son’s SoftBank is infamous for having been involved in companies such as WeWork inc with unfortunate track records. At present, SoftBank has declined to reveal any details concerning its stakes in the company.

According to statements provided by FTX, SoftBank participated in a $900 million series B funding round in 2021 and in a $400 million funding round in 2022. Other companies who invested in the latter rounds, including Coinbase and Sequoia, haven’t shared a breakdown of the investment amount either.

Asymmetric Advisor’s Amir Anvarzadeh predicts that SoftBank has invested billions of dollars in FTX. Anvarzadeh further commented,

This is yet another major blow to Softbank’s private investments.

On the contrary, LightStream Research’s Mio Kato estimates the number to be lower than $100 million. Kato added that in the current situation, SoftBank’s stakes “could easily be down another 50-60-70%.” Till June 2022, SoftBank’s Vision Fund 2 investments averaged from $100 million to $200 million, while Vision Fund 1 stood at $900 million.

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