Binance’s planned bailout of rival crypto firm FTX has blindsided the exchange’s venture investors, who are now worried about their investments getting wiped out completely in the deal.
Four of FTX’s backers told The Information that the fate of their equity stakes remained unknown, and that they were still trying to figure out how they would be impacted by the Binance deal. Another investor said they were fielding texts from limited partners throughout the day, with these institutional investors worried about the value of stakes going to zero.
The crypto exchange has raised nearly $2 billion in VC funding, most recently at a $32 billion valuation, and counts Sequoia Capital and Paradigm as its largest VC backers, according to two people familiar with the matter.
