Morgan Stanley lists companies with FTX bankruptcy exposure

Yahoo Finance's Jennifer Schonberger explains which companies have the largest exposure to the FTX bankruptcy, including Sequoia, Genesis, and Circle.

Video transcript

AKIKO FUJITA: Well, let's take a quick look at crypto markets. We have seen a bit of a rebound coming off of the significant selloff that we saw on the back of the FTX collapse. And we see Bitcoin now right now at 16,400, just above that level, up about 1 and 1/2%. Ethereum at 1,161.

The disgraced founder of FTX, Sam Bankman-Fried, apologized to his former employees in a two-page letter obtained by CoinDesk. The memo sent to company staff detailed the $60 billion in collateral and $2 billion in liabilities that FTX had this spring.

Now SBF says he felt deeply sorry and froze up in the face of pressure when the fallout began. He did not address allegations that FTX diverted customer and corporate funds to prop up Alameda Research, which is, of course, also owned by SBF. He also didn't address any other recent revelations around Alameda.

Well, the FTX fallout continues with analysts picking through the rubble to figure out who's been hit the hardest. Morgan Stanley out with a new report. We've got Yahoo Finance's Jen Schonberger to break that report down for us. Jen, what are the other dominoes to fall?

JENNIFER SCHONBERGER: Good morning, Akiko. We're starting to get a better picture of the contagion and individual exposure that companies have had to FTX's bankruptcy. Morgan Stanley has compiled a list of 63 companies based on media disclosures, public disclosures, as well as their own research on firms that may have suffered losses from FTX's failure.

Among those firms, venture capital firm Sequoia Capital appears to have the largest exposure with $213.5 million. Sequoia has reportedly said that it will mark down its investment in FTX to zero.

Also topping that list, Singapore's state-owned holding company, Temasek, with $205 million. Other high profile crypto companies with exposure, according to Morgan Stanley, Galaxy Digital with over 76 million, US crypto exchange Coinbase with 15 million, stablecoin issuer Circle with over 10 million, and crypto exchange Crypto.com with 10 million in exposure.

Now this research comes as court papers show FTX is on the hook for more than $3 billion to top creditors, though specific names were redacted from those court filings. So this research giving us perhaps a clue into those players.

Meanwhile, shares of Coinbase, which, again, had a $15 million exposure to FTX, according to Morgan Stanley, are up this morning after the crypto exchange's shares plunged earlier this week to its lowest level since going public last April.

Coinbase's shares saw its market cap plummet from $85 billion to below $10 billion before popping up over $11 billion in the last couple of trading days, as worries have swirled over its exposure to FTX, as well as in the wake of Bitcoin's continued descent. Full disclosure, I do own shares of Coinbase. Back to you.

AKIKO FUJITA: OK, Jen Schonberger with the very latest on that front. Thanks so much for that.