Crypto VC David Pakman on FTX an entirely avoidable tragedy

News Summary

  • And then it sounds like they also took the proceeds of that borrowing, and they invested that in highly illiquid assets, like maybe to rescue BlockFi or all these other private companies that FTX recently bought.
  • So all this stuff is just stuff that I think a board, if they knew about it, would be like, no, no.But there was no board, which is mind blowing, considering that VCs poured $2 billion into this company.
  • Your firm is among those firms.I joined CoinFund a little bit more than a year ago, so the investment that the firm made in FTX was a long time ago, before my time, and it’s a tiny, tiny amount.
  • So you take the most highly valued venture-backed crypto company, and it goes from $40 billion to zero, then who is the new ceiling of crypto value?
  • Like, how many other funds when companies and investors have assets at FTX and how long will it take to get those funds back?
  • But FTX was very useful for providing a launching pad for tokens to become liquid, and then either making a market for those tokens or at least providing a place for them to trade and providing liquidity.
If you want to better understand exactly how big a deal it is that the cryptocurrency exchange FTX just imploded, you could do worse than talk with David Pakman, an entrepreneur turned venture capita [+8779 chars]