Crypto investment firm Pantera Capital has limited exposure to collapsed crypto exchange FTX, despite its wide range of portfolios, according to a letter from Pantera Capital partner Paul Veradittakit.
FTX announced that it was facing a liquidity crunch earlier this week and that it would be acquired by rival exchange Binance. The deal with Binance fell through on Wednesday. On Thursday, FTX CEO Sam Bankman-Fried apologized and said that he would look to wind down trading at sister firm Alameda Research.
"On the Pantera side, we had insignificant exposure on the FTX platform and got exposure to FTX as a shareholder primarily through the acquisition of our portfolio company Blockfolio," Veradittakit said.
FTX acquired the crypto data application Blockfolio in 2020 for $150 million. The FTX exposure from the Blockfolio investment is roughly 2% of the firm's total assets under management, said Franklin Bi, Pantera's director of portfolio development, on Twitter. The firm oversees $5.8 billion in assets, according to a recent investment adviser filing,
The Block reached out to both Veradittakit and Pantera Capital for more detail on the exposure from the Blockfolio investment, but had not received a response by publication time.
Pantera is one of the oldest investment firms in the crypto industry, having been founded in 2013. It runs a number of different fund strategies including an early stage token strategy, a blockchain fund that is a venture fund investing in equity and a liquid token strategy.
The Block previously reported that the early stage token fund was down 71% this year through the end of September. The dramatic drop in the fund's performance comes at a time when the majority of tokens and cryptocurrencies are down by 50% or more in the wake of a tricky macro environment with interest rates rising amid surging inflation.
Despite the underperformance this year, the early stage fund has still returned 372% to investors since its inception.
Checking in on portfolio companies
The highest priority for the firm over the past few days has been checking in on the exposure its portfolio firms have to FTX, Veradittakit said.
"After checking in, 95% had little to no issues," Veradittakit said. "Of those that had issues, it was involving having treasury with FTX and we are helping them through options."
"I feel for those, consumer and institutions, that have their assets locked in FTX right now," he added. "There will probably be rippling effects that bleed into other assets associated with FTX, investments that they made, and other commercial relationships that they had. The company has hired top talent and had invested into some amazing companies so those are valuable assets for the industry and we should support those."
This story has been updated to provide more detail on Pantera's exposure to FTX from the Blockfolio investment.
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
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