Samsung Next, the investment arm of the South Korean tech juggernaut Samsung, admitted that it was impacted by the spectacular meltdown of the crypto derivatives exchange FTX but claimed that the exposure is small and that it will “not affect the company’s operations.”
Sam Bankman-Fried’s PR may have been working in overdrive in the past, considering that it was able to fetch investments from major names in the business world, including the investment arm of Samsung. On Oct. 19, 2021, 69 investors participated in FTX’s Series B-1 funding round, which allowed the company to secure around $420 million.
Following the multi-million fund injection, FTX’s market valuation soared to $25 billion. Among these investors were Samsung Next, Ontario Teachers’ Pension, Temasek, and Sequoia Capital, all of which have already confirmed exposure to the now-bankrupt crypto exchange platform.
“We believe FTX is on the leading edge of Web 3.0. It is a completely regulated exchange, headquartered in the Bahamas, and is the only major crypto exchange in the world that is audited. The platform is well-positioned to grow by serving the entire cryptocurrency trading ecosystem, from retail and crypto-native investors to sophisticated day traders and experienced institutional traders,” Samsung Next said in a statement published last December.
At the time, the investment company also described FTX as “one of the hottest startups in the world is rapidly emerging as the leading digital assets exchange, servicing crypto spot trades, futures, tokenized equity prediction markets, and other novel digital assets.”
The company did not disclose the scale of its investment in FTX and after the controversial collapse of the exchange, investors were worried, especially after FTX institutional investors started writing down the millions worth of investment. Singapore state-owned investment firm Temasek wrote down its $275 million investment in FTX, while Sequoia Capital marked down its $214 million investment in the exchange.
However, Samsung Next said that while it has an exposure to the collapsed exchange, it is small. “Compared to Samsung Next’s total operating funds, the investment amount in FTX is small, so it will not affect the company’s operations,” it said, as reported by Korean Daily.
Samsung Next, formerly called Samsung Global Innovation Center, was launched in 2017 and intended “to increase Samsung’s global support of early-stage startups pursuing advanced software and services innovation” and “targets pre-seed to Series B investments with a focus on virtual reality, artificial intelligence, IoT and other new frontier technologies.”
Bankman-Fried stepped down as the CEO of the exchange on Nov. 11 after FTX and its affiliated businesses filed for Chapter 11 bankruptcy protection.