Alfred Lin, a renowned partner at Sequoia Capital, ardently defended the firm’s significant $213.5 million investment in FTX, the crypto exchange now facing bankruptcy.

During his appearance at the Bloomberg Tech Summit, Lin showcased an unwavering belief in Sequoia’s decision to back FTX. Reflecting on the firm’s due diligence, he said, “Given the same circumstances and information, we would likely tread the same path.” Lin emphasized that Sequoia’s due diligence was comprehensive, and the decision was not made lightly.

With approximately $85 billion in managed assets, Sequoia Capital has a diversified portfolio including leading tech firms and multiple ventures in the crypto sphere.

Sequoia Capital’s venture into FTX and FTX US was through two of its funds, cumulating an investment totalling $213.5 million. The Global Growth Fund III was responsible for a $150 million slice — accounting for 3% of the fund’s capital — whereas the Capital Global Equities Fund injected $63.5 million into the companies, making up less than 1% of its overall portfolio.

Sequoia communicated to its partners in November about recognizing its FTX investment as a total loss following the exchange’s closure. The letter emphasized Sequoia’s approach to risk-taking in investments, accepting that some ventures will surpass expectations, while others may fall short.

Echoing this sentiment at Bloomberg’s event, Lin highlighted that Sequoia’s investment strategy hinges on backing founders and taking considered risks, acknowledging that not all investments bear fruit. Despite the dramatic downfall of FTX and the consequent financial hit, Lin asserted Sequoia’s ongoing enthusiasm for crypto-based ventures.

Beyond the sizable financial blow, FTX’s downfall also led to legal complications for Sequoia. Some former users of the bankrupt exchange have initiated legal action against its financial backers, including Sequoia, Thoma Bravo, and Paradigm. The lawsuit suggests the firms contributed to a promotional marketing campaign in 2021, which ostensibly conferred an “air of legitimacy” to FTX. These firms were all contributors to the exchange’s record-breaking $900 million Series B funding round in July 2021.