Naomi Osaka is among a group of prominent athletes who have lost money in the recent crash of cryptocurrency exchange FTX Investment.
FTX Investment is a cryptocurrency company that has attracted the likes of Osaka along with figures such as Tom Brady, Gisele Bundchen and Steph Curry.
Osaka, is said to have taken a stake in FTX in March on a ‘long-term’ contract that would pay her in cryptocurrency.
Curry had jumped on board in September 2021, in a move that drew attention as it represented the NBA star’s first foray into the world of cryptocurrency.
“I’m excited to partner with a company that demystifies the crypto space and eliminates the intimidation factor for first-time users,” he said at the time.
The market value of FTX fell by an astonishing 70% this week as the company’s CEO came out to beg investors for a $4 billion bailout in the face of what they described as a liquidity crunch that has created a solvency risk for FTX.
“In recent days, a liquidity crunch has created a solvency risk for FTX,” venture capital firm Sequoia wrote in a note to partners.
“The full nature and extent of this risk is not known at this time. Based on our current understanding, we are marking our investment down to $0.”
The crisis was brought on by a loss of confidence in banking operations from customers who withdrew as much as $6 billion in the 72 hours before Tuesday morning, before the FTX blocked further withdrawals.
Manager of the company Sam Bankman-Fried has taken responsibility for the crash.
“Sorry. That’s the biggest thing,” Bankman-Fried wrote in a series of tweets. “The full story here is one I’m still working out every detail, but as a very high level, I fucked twice.
“We saw about $5bn in withdrawals on Sunday – the largest by a huge margin.”
Bankman-Fried insists that FTX Investments has so far managed to avoid total insolvency.
According to a Guardian report, the sudden collapse in the value of the crypto exchange was prompted by leaked documents which suggested that Alameda Research, a hedge fund with ties to FTX through its joint owner, Bankman-Fried, was nearly insolvent.
“One way or another, Alameda Research executes trading,” Bankman-Fried added.
It’s unclear how much the crash will cost the athletes, but for someone like Osaka, it shouldn’t be a total disaster given her diverse investment portfolio.
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