From Temasek to Genesis, here's the direct impact of FTX's failure on other corporations

In the first two weeks of November, crypto exchange FTX went from a leading crypto exchange to a $16 billion bankruptcy – the largest of the year so far.

Insiders, customers, the press and regulators are still piecing together what caused the biggest corporate failure in the cryptocurrency’s 14-year history and what such a decline means as it spills over into the digital asset market.

So far, the fallout has meant losing, freezing or writing off at least $1.8 billion in funds, mostly involving equity investors from past funding rounds and firms that held money with FTX. It also represents hundreds of millions of dollars in credits, loans and acquisition financing between FTX, its US subsidiary Alameda Research and outside parties.

Here’s the damage so far.

Equity Investors

Equity investors stand to lose the most capital from FTX in a bankruptcy, but they are also the biggest investors, a complete write-off of their investment is little more than a scratch on their bottom lines. On a Thursday statementTemasek revealed that its $275 million investment in FTX and related businesses, the second largest ever reported, represents just 0.09% of its $403 billion net portfolio value.

On the other hand, the implications are worse for smaller crypto-specific equity investors like Paradigm and Multicoin Capital, who also keep some of their funds with the platform.

Companies with funds blocked on FTX

Over the past week, dozens of crypto firms have announced that they still have funds blocked on the FTX platform. Ranging from a few million to Genesis Trading’s $175 million, these companies are now unsecured creditors in FTX’s Chapter-11.

It is unclear what the implications will be for most of these players. One way to think about it, according to Noel Acheson, author of a crypto and macroeconomics newsletter, is a “domino effect.”

“They will have customers whose funds will be blocked, who will also have customers who will be blocked and so on,” Acheson told Yahoo Finance.

Those firms should also be expected to play a bigger role during, sometimes in opposition, the fight over how to split up FTX’s remaining assets.

Indirect ripple effects

Since FTX first stopped processing customer withdrawals, crypto lender BlockFi has also frozen customer accounts due to its $250 million credit line. Crypto.com also faces higher customer withdrawals and scrutiny while Genesis, the largest crypto lender in the industry, pause customer withdrawals.

David Hollerith is a senior reporter at Yahoo Finance covering cryptocurrency and stock markets. Follow him on Twitter at @DsHollers

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