1 year ago
Director of Portfolio Development astatine Pantera Capital, Franklin Bi, has created a Twitter thread discussing portfolio preventative measures taken pursuing the caller FTX and Alameda Research fallout.
1/ The past fewer days person tested our industry, with fallout for months to come.
Here's an excerpt from a enactment to @PanteraCapital founders / investors re: interaction to our portfolio & actions we took successful the archetypal 24 hrs.
Hope it tin assistance different builders & funds navigate ahead.
— franklin (@FranklinBi) November 10, 2022
The Pantera squad “assembled a virtual warfare room” to transportation retired a thorough hazard appraisal of their early-stage portfolio, and to found an enactment program acceptable for contiguous implementation. Their 2 goals were:
- To place imaginable risks their portfolio teams mightiness beryllium exposed to
- To scope retired to at-risk teams straight and connection assistance
Aiming to rapidly found and transportation retired these 2 goals, Franklin emphasized that successful times of crisis, “we indispensable enactment and enactment quickly.”
Risk Assessment & Identification
Five main risks were identified, 3 of which were deemed urgent, according to Franklin.
The 5 risks were:
- Counterparty risk: Outstanding recognition vulnerability to FTX / Alameda; hazard of default
- Custodial risk: Holding funds successful FTX accounts; hazard of funds being frozen oregon lost
- Price volatility risk: Holding definite assets, e.g., FTT, connected equilibrium sheet; hazard of terms exposure
- Investment risk: FTX / Alameda is simply a nonstop investor; hazard of liquidation successful unwind oregon merchantability process
- Customer risk: FTX / Alameda is simply a customer; hazard of gross loss
Up to 70 portfolio companies were identified arsenic having “potentially important [and] urgent exposure”.
The bulk of this radical consisted of centralized concern (CeFi) companies, decentralized concern (DeFi) protocols, and anyone who whitethorn clasp tokens successful their treasury. Pantera plans to proceed and grow connected this process implicit the coming weeks, and months.
Day 1 Findings
Up to 95% of the portfolio teams wrong the archetypal outreach had small to nary vulnerability to FTX oregon Alameda — this was partially attributed to proactive hazard absorption arsenic good arsenic custody and treasury absorption practices.
Two early-stage teams identified wrong the remaining 5% were flagged for having implicit 50% of funds locked connected FTX, perchance impacting their runway. Pantera said it remains committed to helping the 2 teams research each disposable options.
A further 2 teams person publically disclosed their presumption and are receiving enactment from Pantera.
1/ We are gladsome to stock that Cega has received $13.6M USDC successful funds from Alameda which covers 100% of Cega’s trading vulnerability to Alameda & output owed to date. All users with vulnerability to Alameda trades (Cruise Control, Genesis Basket, Supercharger vaults) tin consciousness secure.
— cega 
(@cega_fi) November 10, 2022
1) We've experienced aggregate marketplace cycles implicit the past 5 years, and our absorption has been and continues to beryllium the aforesaid – delivering an industry-leading work for trading, storing, hedging, and managing integer assets with a cardinal absorption connected these halfway pillars.
— Amber Group (@ambergroup_io) November 9, 2022
Ultimately, the interaction connected Pantera is minimal and immoderate vulnerability has been resolved swiftly and smoothly.
With zero vulnerability to Alameda, Pantera’s FTX/FTT vulnerability is constricted to astir 2% of the full AUM arsenic a effect of their Blockfolio 2020 acquisition.
Franklin closed his thread by saying:
“We’re unshaken – and much importantly, we’re present to enactment you nevertheless we can. Our conflict scars are to your benefit. Reach retired to anyone connected our squad anytime.”
The station Pantera Capital swiftly implements precautionary measures pursuing FTX, Alameda fallout appeared archetypal connected CryptoSlate.
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