FTX founder Sam Bankman-Fried leaves the courthouse following his arraignment in Latest York City on December 22, 2022.
Ed Jones | Afp | Getty Images
It wasn’t just Tom Brady and Gisele Bündchen.
The roster of high-profile investors who lost money betting on crypto exchange FTX also included Latest England Patriots owner Robert Kraft and billionaire hedge fund manager Paul Tudor Jones, in accordance with court filings released late Monday.
Sam Bankman-Fried’s well-documented success at raising money and charming investors prolonged to a more expansive set of celebrity investors and big-name financers than was previously disclosed. FTX went through 4 fundraising rounds to succeed in a $32 billion valuation by early last 12 months, before ultimately spiraling into chapter 11 in November.
Bankman-Fried, FTX’s co-founder and former CEO, has pleaded not guilty to multiple criminal charges, including fraud and money laundering. In December, he was released on a $250 million bond while awaiting trial.
For enterprise backers, FTX represents a lack of historic proportions. Sequoia Capital said in November that it had marked its investment of over $210 million all the way down to zero. Before former equity holders can begin attempting to recoup any of their investment, customers face an extended road to recovery, because the bankruptcy process winds its way through court and across dozens of jurisdictions.
FTX’s enterprise investors included a bunch of luminaries. Dan Loeb controlled over 6.1 million preferred shares through Third Point-connected enterprise funds. Rival exchange Coinbase held nearly 1.3 million preferred shares.
Jones, the founding father of Tudor Investment, apparently owned shares through a series of family trusts. Kraft controlled 155,144 shares of preferred stock through previously undisclosed investments in FTX.
Brady, who at age 45 is the winningest quarterback in National Football League history, was a known FTX backer and a pitchman for the corporate. He held common stock in the corporate alongside Bündchen. The celebrity couple announced their divorce in October after 13 years of marriage.
CNBC has compiled and analyzed the next preferred share ownership using Delaware bankruptcy court filings.
Series B: July 2021
Despite being called a Series B raise, this July 2021 fundraising round was FTX’s first infusion of outdoor capital, excluding an early investment from Binance that was ultimately wound down. Investors included Paradigm and Sequoia, in addition to Thoma Bravo and Third Point. The $900 million round valued FTX at $18 billion.
Jones, who told CNBC in October 2022 that his bitcoin exposure was “minor,” appears to have invested in FTX through a series of family trusts.
Just months after a $900 million financing, FTX closed one other funding round for $420 million, which included most of the original Series B backers. The investor list expanded to incorporate previously undisclosed capital from Alibaba co-founder Joe Tsai’s family office, Blue Pool, amongst others.
Series C: January 2022
As FTX and Bankman-Fried spent a whole lot of tens of millions of dollars on promoting deals and sponsorships, the corporate continued to hunt enterprise money at a voracious pace. In January 2022, FTX closed its $400 million Series C round at a valuation of $32 billion.
FTX US Series A: January 2022
FTX, which was based within the Bahamas, created FTX US in response to U.S. regulations on cryptocurrency trading. Regulators have since alleged that FTX US was separated from the international arm of FTX in name only.
In trying to determine its independence, FTX US closed a $400 million funding round in January 2022 from investors including Singapore sovereign wealth fund Temasek and Masayoshi Son’s SoftBank Vision Fund. Previously undisclosed enterprise backers for the round included Kraft and Daniel Och’s family office, Willoughby Capital.
In keeping with bankruptcy filings and regulatory complaints, funds and customer assets moved freely among the many FTX entities. Despite being partially regulated by the Commodity Futures Trading Commission, FTX US clients face an equally arduous process in bankruptcy court to try to retrieve a few of their money.
Equity investors in FTX US, like those in FTX, are looking at a zero.
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