Key Points:
Sino Global Capital files a $67.3 million claim against FTX over fund partnership fallout.
Liquid Value fund targeted high-net-worth individuals, raised $90 million, but FTX link wavered.
Huobi and Galois Capitals losses to FTX spotlight cryptocurrency market risks.
The fund, striving to amass $200 million, primarily targets high-net-worth individuals. This venture marked a significant shift for Sino, as it marked their first foray into external capital sourcing through a formal fund mechanism.
FTXs role was initially characterized as “co-GP and anchor LP” in the promotional material for the fund.
The prospect of leveraging Bankman-Frieds diverse token universe was highlighted. By January 2022, the fund had already garnered $90 million in investments, with FTX being a prominent anchor investor.
While Sino Global initially claimed their connection with FTX was limited to a mid-seven-figure custody holding, SEC filings from 2022 disclosed Bankman-Frieds indirect investment in the fund, along with Alameda Research and its subsidiary, Alameda Ventures.
Although the fund is no longer under SEC registration, it remains active under the jurisdiction of the Cayman Islands Monetary Authority. This move comes as the latest development in an ongoing saga that started with the funds partnership with Sam Bankman-Fried in 2021.
Looking back to the prior years conclusion, Sino admitted that their exposure to FTX had crumbled, resulting in damage amounting to an undisclosed “seven-digit” sum.
Before Sinos predicament, a series of other victims had also come forward, revealing their own exposure and vulnerabilities to FTX. For instance, Huobi faced an $18 million setback, while the Genesis Capital fund sustained losses amounting to $40 million.
In response to FTX‘s collapse, Sino released a statement expressing their initial trust in FTX’s commitment to industry advancement.