Director of Portfolio Improvement at Pantera Capital, Franklin Bi, has created a Twitter thread discussing portfolio preventative measures taken following the current FTX and Alameda Analysis fallout.
1/ The previous few days have examined our {industry}, with fallout for months to return.
This is an excerpt from a word to @PanteraCapital founders / buyers re: affect to our portfolio & actions we took within the first 24 hrs.
Hope it might assist different builders & funds navigate forward.
⬇️
— franklin (@FranklinBi) November 10, 2022
The Pantera crew “assembled a digital battle room” to hold out a radical danger evaluation of their early-stage portfolio, and to ascertain an motion plan set for instant implementation. Their two targets have been:
- To determine potential dangers their portfolio groups may be uncovered to
- To succeed in out to at-risk groups immediately and provide help
Aiming to quickly set up and perform these two targets, Franklin emphasised that in occasions of disaster, “we should act and act shortly.”
Threat Evaluation & Identification
5 fundamental dangers have been recognized, three of which have been deemed pressing, in line with Franklin.
The 5 dangers have been:
- Counterparty danger: Excellent credit score publicity to FTX / Alameda; danger of default
- Custodial danger: Holding funds in FTX accounts; danger of funds being frozen or misplaced
- Worth volatility danger: Holding sure belongings, e.g., FTT, on stability sheet; danger of value publicity
- Funding danger: FTX / Alameda is a direct investor; danger of liquidation in unwind or sale course of
- Buyer danger: FTX / Alameda is a buyer; danger of income loss
As much as 70 portfolio firms have been recognized as having “probably important [and] pressing publicity”.
The vast majority of this group consisted of centralized finance (CeFi) firms, decentralized finance (DeFi) protocols, and anybody who could maintain tokens of their treasury. Pantera plans to proceed and increase on this course of over the approaching weeks, and months.
Day 1 Findings
As much as 95% of the portfolio groups inside the preliminary outreach had little to no publicity to FTX or Alameda — this was partially attributed to proactive danger administration in addition to custody and treasury administration practices.
Two early-stage groups recognized inside the remaining 5% have been flagged for having over 50% of funds locked on FTX, probably impacting their runway. Pantera stated it stays dedicated to serving to the 2 groups discover all out there choices.
An additional two groups have publicly disclosed their standing and are receiving assist from Pantera.
1/ We’re glad to share that Cega has obtained $13.6M USDC in funds from Alameda which covers 100% of Cega’s buying and selling publicity to Alameda & yield owed so far. All customers with publicity to Alameda trades (Cruise Management, Genesis Basket, Supercharger vaults) can really feel safe.
— cega 🥚 (@cega_fi) November 10, 2022
1) We have skilled a number of market cycles over the previous 5 years, and our focus has been and continues to be the identical – delivering an industry-leading service for buying and selling, storing, hedging, and managing digital belongings with a key deal with these core pillars.
— Amber Group (@ambergroup_io) November 9, 2022
Finally, the affect on Pantera is minimal and any publicity has been resolved swiftly and easily.
With zero publicity to Alameda, Pantera’s FTX/FTT publicity is restricted to roughly 2% of the overall AUM because of their Blockfolio 2020 acquisition.
Franklin closed his thread by saying:
“We’re unshaken – and extra importantly, we’re right here to assist you nonetheless we are able to. Our battle scars are to your profit. Attain out to anybody on our crew anytime.”
