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FTX Alameda contagion: Full list of entities with exposure to SBF’s firms including Voyager, Stargate, Tom Brady seed investments

By Daniela Ešnerová

Edited by Martyn Cornell


Updated

The FTX logo and name is displayed on a mobile phone
The bankruptcy filing revealed that FTX and Alameda liabilities range from $10bn to $50bn. – Photo: Shutterstock

The American football star Tom Brady, the defunct crypto lender Voyager Digital, the cross-chain protocol Stargate and the city of Miami are among the potential one million creditors of the collapsed cryptocurrency exchange platform FTX and its sister firm Alameda Research, papers filed as part of the two companies’ bankruptcy proceedings have revealed.

Both companies were founded by Sam Bankman-Fried, also known as “SBF”, the entrepreneur once dubbed the “crypto golden boy”.

Now that FTX, Alameda, and 134 corporate entities filed for Chapter 11 voluntary bankruptcy, the fallout has spread across and beyond the cryptocurrency industry.

The bankruptcy filing also revealed that the liabilities of FTX and Alameda each range between $10bn and $50bn. FTX also initially disclosed more than 100,000 creditors in the documents. 

However, in an updated filing, FTX lawyers later revised the figures. “In fact, there could be more than one million creditors in these Chapter 11 cases,” they said.

FTX token (FTT) to US Dollar

Crypto projects under pressure

During the final days of FTX and Alameda, crypto projects rushed to untangle their ties with the crumbling crypto empire. 

The company behind the intercorporeality protocol LayerZero, LayerZero Labs, bought its own stake back from FTX and Alameda just a day before FTX/Alameda filed for bankruptcy. 

In a memo to investors, Bryan Pellegrino, co-founder, and chief executive of LayerZero Lab,s wrote on 10 November: “We’ve worked around the clock for the past 72 hours to structure an agreement and have bought FTX/FTX Ventures/Alameda out of 100% of their equity position, token warrants, and any and all agreements between us.” 

Pellegrino also stepped in with efforts to save the cross-chain bridge Stargate, built on LayerZero, whose total supply was bought by Alameda in March. 

“Separately, we’ve also purchased the locked tokens from the community auction that Alameda had and will be putting up a proposal to transfer these to the Stargate Foundation pari passu and let the community decide what to do with them,” Pellegrino wrote.

Sponsorship deals and celebrity investment

The dramatic turn of events that saw FTX, which was valued at $32bn just a few months ago, file for bankruptcy has shocked both the crypto space and mainstream investors.

In the months leading up to its looming demise, FTX spent hundreds of millions of dollars on a marketing spree. 

In May 2021, the Bahamas-headquartered exchange bought the naming rights to a sports arena in Miami, Florida, which is home to the NBA team Miami Heat.

The mega deal where FTX pledged to pay $135m over 19 years is now off. 

Miami-Dade County’s mayor, Daniella Levine Cava, said in a statement: “The reports about FTX and its affiliates are extremely disappointing.”  She added:

“Miami-Dade County and the Miami HEAT are immediately taking action to terminate our business relationships with FTX, and we will be working together to find a new naming rights partner for the arena.”

Just a month after striking the Miami Heat deal, FTX launched a $20m ad campaign starring the American football star Tom Brady and the Brazilian model Gisele Bündchen.

The pair, who were married at the time, but have since divorced, also took an equity stake in FTX and now seem sure to have taken a loss on the investment as SBF’s once-hyped crypto empire fell. 

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Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
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Spread 106.00

Brady has now been named as a defendant in a class-action lawsuit against FTX. Fellow sports stars Naomi Osaka and Stephen Curry, along with the comedian Larry David, who all promoted the failed exchange, have also been named.

Voyager FTX bailout scrapped

FTX’s fallout will also be felt by creditors of the defunct crypto lender Voyager Digital, which filed for bankruptcy in July. 

In September, FTX stepped in and offered a lifeline for Voyager clients by buying the collapsed lender’s assets. Under the proposal, FTX pledged to recover up to 72% of the value of Voyager’s client accounts. Now that FTX filed for bankruptcy, the deal is off. 

The world’s biggest cryptocurrency exchange, Binance, is now relaunching its bid to buy assets of the defunct crypto lending platform.

BlockFi on the brink of bankruptcy?

Another crypto lender, BlockFi, which had significant exposure to FTX, is reportedly eyeing bankruptcy. 

BlockFi wrote in an email to clients on 14, November, 2021: “The rumours that a majority of BlockFi assets are custodied at FTX are false. That said, we do have significant exposure to FTX and associated corporate entities that encompasses obligations owed to us by Alameda, assets held at FTX.com, and undrawn amounts from our credit line with FTX US,

“While we will continue to work on recovering all obligations owed to BlockFi, we expect that the recovery of the obligations owed to us by FTX will be delayed as FTX works through the bankruptcy process.

“At this time, withdrawals from BlockFi continue to be paused. We also continue to ask clients not to submit any deposits to BlockFi Wallet or interest accounts.”

On 28 November, 2022, Decrypt reported that BlockFi was filing for bankruptcy. 

Genesis freeze following ‘FTX implosion’

Days after FTX’s demise, the lending unit of the cryptocurrency giant Genesis Global Capital temporarily suspended redemptions and new loan originations. 

“This decision was made in response to the extreme market dislocation and loss of industry confidence caused by the FTX implosion,” Genesis wrote on Twitter

Shortly after the announcement, the cryptocurrency exchange Gemini froze withdrawals for its crypto lending Earn programme which lets users lend cryptocurrencies to certain institutional borrowers and earn interest. 

Gemini said: “We are aware that Genesis Global Capital, LLC (Genesis) – the lending partner of the Earn programme – has paused withdrawals and will not be able to meet customer redemptions within the service-level agreement (SLA) of five business days.”

‘Deep regret’

Venture capital firms that invested in FTX and Alameda have been signing off their investments to zero.

Matt Huang, co-founder of the crypto-focused investment firm Paradigm, spoke of deep regret for having invested in SBF.  “Facts are still coming to light, and there will be many lessons to learn,” Huang wrote on Twitter.

“We feel deep regret for having invested in a founder and company who ultimately did not align with crypto’s values and who have done enormous damage to the ecosystem.”

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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