In an official statement published on Twitter on November 15, Sino Global Capital revealed it has millions of dollars in assets held in FTX custody. While the company didn’t specify the exact sum, it acknowledged that the loss amounted to "mid-seven figures."
"The events over the past week have been shocking and saddening. Like many of you, we trusted FTX to be a good actor committed to pushing the industry forward," the statement read. "We deeply regret that misplaced trust."
The letter assured investors that Sino remains operational and never invested any limited partner capital into FTX equity. Currently, its main focus is on protecting LPs and working with portfolio companies, which are mostly web3 infrastructure and gaming projects.
Sino Global also clarified that it didn’t employ any leveraged or short-term trading strategies, plus its investments into FTX equity were made prior to the launch of the fund.
“Today, our industry is hurting. There is a long road to recovery ahead, and we have faith that the community will once again evolve. Our thesis has not changed — we believe blockchain technology to be the most important innovation since the advent of the internet,” the letter concluded.
For context, in October 2021 Sino Global opened its $200 million Liquid Value Fund I with substantial backing from FTX, the first time the VC firm accepted outside capital. The focus of the fund was on Solana and Ethereum ecosystems in Asia, particularly India.
Crypto exchange FTX and approximately 130 of its subsidiaries, including FTX.US and trading firm Alameda Research, filed for Chapter 11 bankruptcy on Friday as CEO Sam Bankman-Fried announced his resignation. The major catalyst for FTX’s implosion was leaked Alameda’s balance sheet, which revealed that a significant portion of Alameda’s asset holdings were in FTX’s native token, FTT.