Multicoin Capital's third VC fund has exposure of more than $25 million to FTX

Quick Take

  • Multicoin Capital has more than a $25 million stake in FTX via its $430 million venture fund, according to a letter obtained by The Block. 
  • The venture fund invested $25 million into FTX US and held around $2 million on FTX International for the purpose of investments via USDC. 

Multicoin Capital, a top-tier crypto venture capital firm, has revealed its more than $25 million stake in FTX via its $430 million venture fund, according to a letter obtained by The Block. 

The crypto venture capital firm's third venture fund invested $25 million into FTX US, according to the correspondence, which said it represented 5.8% of the fund. 

Multicoin announced the $430 million fund in July. At the time, it told The Block that its founders, Kyle Samani and Tushar Jain, were the biggest LPs in the fund, along with other unnamed institutional backers. 

"This position will be assessed at the end of Q4 in accordance with VF3's valuation policy, at which time we will determine if a markdown is appropriate," referring to the venture fund, said the letter. 

Along with the $25 million investment into FTX US, the venture fund also held approximately $2 million on FTX International. It said it held these funds as some of its investments were funded by sending USDC over crypto rails on the exchange rather than via USD wire. 

The Block reached out to Multicoin but the firm declined to comment. 

The letter cites the ongoing acquisition by Binance, suggesting that it was written before the deal fell through last Wednesday. The firm said they expected to recoup this entire position at that time. 

"It remains a fluid situation, and there is still a probability that the transaction does not close," said the letter. "In that case, we may not get a 100% recovery of the USD held at FTX International and recovery would likely be further delayed."

In spite of this, the letter reaffirmed that the firm remains "well-capitalized." 

Last week, FTX announced that it was facing a liquidity crunch earlier this week and that rival exchange Binance would acquire it. On Friday, FTX filed for Chapter 11 bankruptcy protection. 

News of how Multicoin's venture fund has been affected by the FTX fallout follows a previous report by The Block, which detailed how around 10% of Multicoin Master Fund’s total AUM is stuck on the crypto exchange per a separate letter. 

Update: This story has been updated after email correspondence from Multicoin. 


© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.