China-based crypto venture firm Sino Global Capital has broken its silence about the extent of its exposure to FTX.
The company said its direct exposure to FTX, the exchange, "was confined to mid-seven figures held in custody," in a letter published on Twitter on Nov. 15. It did not specify an exact sum. The letter added that Sino remains operational and continues to invest in startups.
Sino opened its first fund to external investors in October of last year. Speculation over Sino's positions has been brewing ever since FTX revealed it was facing a liquidity crunch and then subsequently filed for bankruptcy. Sino is a known big backer of FTX and FTX-adjacent projects, such as Solana and Serum.
"Our investment in the equity of FTX was made prior to the launch of our fund and we did not invest any LP capital into FTX," said the company in today's letter.
It also clarified that the firm hasn't taken any leveraged or short-term trading strategies in relation to investment positions.
"Like many of you, we trusted FTX to be a good actor committed to pushing the industry forward," the letter said. "We deeply regret that misplaced trust."
The firm's CEO Matthew Graham was pictured with FTX CEO Sam Bankman-Fried in late October in Riyadh. FTX was the anchor investor in Sino's first external fund.
"From the very beginning, Matthew and the Sino Global Capital team supported the FTX vision and then worked with us to help make it a reality. The Fund will now provide more opportunities to projects that are pushing crypto and blockchain technologies to the next level," said Bankman-Fried at the time of the fund's launch.
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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