Sequoia has marked its investment in FTX down to $0

Sequoia has marked its investment in FTX down to $0(twitter.com)

137 points by dwynings 3 years ago | 50 comments

robswc 3 years ago |

I actually talked to Sam for a bit in the "early days" and he always seemed like an OK guy. Approachable and "honest" which makes this all the worse... I kept asking "why start an exchange when you're killing it with Alameda?" and his response seemed to consistently be about wanting to make a better product and legitimize crypto... ugh, don't even know what to think now... if that was all a front.

It's really odd to think because its always "some guy in the news" that gets bad press and demonized (not unjustly), never really someone you "know of." (prob a lot of ppl w/that experience hanging around HN tho, lol)

It's just weird feelings but mostly just "wtf man."

AlexandrB 3 years ago | |

> ugh, don't even know what to think now... if that was all a front.

It's very easy to "get high on your own supply" and lose objectivity around what you're doing and how likely it is to succeed. This doesn't require malice either.

vba616 3 years ago | | |

From April of this year:

https://www.bloomberg.com/news/articles/2022-04-25/sam-bankm...

I don't know how to reconcile this with the comments people are making. He didn't sound like he was under illusions about what he was doing. And surely other people read/listened to this.

It was pretty much laid out with a ton of foreshadowing.

Near the end:

"And it is sort of like real monetizable stuff in some senses. And you know, at some point if the world never decides that we are wrong about this in like a coordinated way, right? Like you're kind of the guy calling and saying, no, this thing's actually worthless, but in what sense are you right?"

"And if you're like, that's dumb, it has no cashflow flow. I'm gonna short sell it. You lose all your money."

cryptoanon 3 years ago | |

Alameda messed up in the same way that three arrows did. That’s not necessarily Sam’s fault, because he did not run Alameda at the time. However, it seems like you build them out by providing them with a ton of FTT collateral so he’s pretty much complicit.

csomar 3 years ago | |

Most people (all?) are driven by circumstance rather than their "inner" self. He might be a good/honest guy that started this with good and honest intentions; but things went very differently. There is little he can do, and I think there are few people in the earth who can stand to circumstance. (especially when billions and millions of people are involved.)

balsam 3 years ago | |

It’s a regular failure mode in human interactions. Just because someone is attractive/charismatic/sincere doesn’t mean they should be taken seriously, and just because someone is ugly/inarticulate/creepy doesn’t mean they should be disbelieved. Extreme idiocy and true genius are just invisible to most people (before the fact), and the discerning folk get only Schadenfreude.

danrocks 3 years ago |

This piece will forever be on their site, however: [0].

[0] - https://www.sequoiacap.com/article/sam-bankman-fried-spotlig...

rippercushions 3 years ago | |

> Professor Bankman-Fried is my tutor. He’s as good at explaining the principles of macroeconomics as anyone out there in the world today—and I know this for a fact because I’ve subsequently watched YouTube’s best on the same subject. But SBF teaches me Macro while simultaneously playing round after round of Storybook Brawl.

This stuff is beyond parody. Dude's getting interviewed for a nauseatingly butt-kissing puff piece, and he can't tear himself away from a game targeted at literal children. (He bought the developers and proceeded to cram NFTs into it.)

SantalBlush 3 years ago | | |

Also, this

>I know this for a fact because I’ve subsequently watched YouTube’s best on the same subject

should never be said about any subject, unless it's being said ironically.

paulpauper 3 years ago |

$0. That sounds about right.

Wow.. I think Mr. Bankman's wealth was $100 billion in Jan 2022 according to a Fortune estimate. I wonder what would have happened had CZ not made that tweet. Hmm...makes you wonder who profited from all of this. Imagine if binance bought puts on BTC before this announcement.

senttoschool 3 years ago | |

FTX and Alameda would have gone under regardless.

babyshake 3 years ago | |

We probably don't have to imagine.

ijustwanttovote 3 years ago | |

Binance probably shorted FTT and SOL.

I would’ve done the same if I wasn’t based in the USA.

sfe22 3 years ago | | |

I think they had plenty of FTT, probably just sold their instead.

throwoutway 3 years ago | |

> not made that tweet

Which tweet?

sawzaw 3 years ago |

Given Sam Bankman-Fried's relation to effective altruism, it's also interesting to read how the EA community is responding to this. For example:

https://forum.effectivealtruism.org/posts/tdLRvYHpfYjimwhyL/...

https://forum.effectivealtruism.org/posts/yjGye7Q2jRG3jNfi2/...

rippercushions 3 years ago | |

Eh, taking venture capital and donating it all to random strangers is pretty altruistic in my book.

senttoschool 3 years ago | | |

He took even more user funds and did the same.

friedman23 3 years ago |

So their cost basis was $150mm. What was the highest valuation FTX was marked at? I'm curious what the real change in value was for this fund.

wmf 3 years ago | |

$32B in September.

ksec 3 years ago |

This makes me wonder, is Sequoia as good as they once were?

Or are they now completely different?

iainctduncan 3 years ago |

Am I the only who feels like these stories are the Boogie Nights of the 2020s?

Unreal.

eurasiantiger 3 years ago |

The fund remains in good shape. It has a gym subscription with two hours personal training per week, and it regularly participates in marathons and Iron Man events.

baidifnaoxi 3 years ago |

From a linked article, a quote that basically describes the Federal Reserve

>It’s almost as if SBF found a way to hack the financial system, printing billions of dollars out of thin air against which he was able to borrow massive sums from unknown counterparties. Almost as if he discovered a financial perpetual motion machine…

toast0 3 years ago | |

Sure, but if nothing else, you can use federal reserve notes to pay your taxes. FTT can be used for what now?

astrange 3 years ago | |

That's the Treasury.

The Fed loans you money. If you confuse someone lending you money with them giving you money you have a problem.

techsplooge 3 years ago |

So much FUD around this event. FTX is fine, they have a stadium and other high profile sponsorships.

noirbot 3 years ago | |

"They've spent too much money to be out of money" is a really weird read of how money works.

MandieD 3 years ago | |

Not sure if this was sarcasm, but during the transition from Dotcom Boom to Dotcom Bust, it was a bit of folk wisdom that if you saw a Dotcom rename a stadium, its shareholders best start selling and its employees best start job hunting.

bowenjin 3 years ago | |

I feel had this comment been on reddit, it would have been interpreted as sarcasm and received upvotes.

dorkwood 3 years ago | | |

Really? In my experience, sarcasm doesn't fly on reddit unless you end with /s

dmak 3 years ago | |

That is too much copium.

MrMan 3 years ago | |

The Kroenke's will back FSB just like they backed Arteta, FTX will be top of the table this time next year remind me one year

braingenious 3 years ago | |

lol