FTX Wants Another $1B to Buy More Crypto Companies: Report

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  • FTX’s fresh cap­i­tal would go towards fur­ther deal­mak­ing, if the round closes
  • CEO Sam Bankman-Fried has said his cryp­to com­pa­ny bailouts have led to mixed results

Cryp­to exchange FTX could retain its $32 bil­lion val­u­a­tion if a fresh bil­lion-dol­lar fundrais­ing round goes through, despite the bear market.

CNBC report­ed on Thurs­day that FTX is in talks to raise the cap­i­tal, just as the price of bit­coin hov­ers at its low­est point since Decem­ber 2020. Dis­cus­sions report­ed­ly aren’t final and could still fall apart.

If FTX does secure its tar­get invest­ment, the val­u­a­tion would match pre­vi­ous fundrais­ing round in Jan­u­ary. At the time, it raised $400 mil­lion in a Series C round in its third raise with­in six months.

Among the exchange’s cur­rent investors are SoftBank’s Vision Fund, Race Cap­i­tal, Tiger Glob­al, ten­nis play­er Nao­mi Osa­ka and British hedge fund man­ag­er Alan Howard.

The news sug­gests FTX is one major cryp­to play­er rel­a­tive­ly unscathed by the mar­ket down­turn. It scored a num­ber of dis­count­ed deals, includ­ing Cana­di­an exchange Bit­vo along­side the right to buy cryp­to lender Block­Fi for a max­i­mum of $240 mil­lion next year, far below the startup’s most-recent $4.8 bil­lion valuation.

The exchange was also report­ed­ly look­ing to acquire invest­ing app Robin­hood, in which CEO Sam Bankman-Fried had per­son­al­ly acquired a 7.6% stake in May.

FTX didn’t return Block­works’ request for com­ment by press time.

FTX founder Bankman-Fried, the JPMorgan of crypto?

Race Cap­i­tal part­ner Chris McCann, an ear­ly FTX backer, told Block­works in a June inter­view that he always thought Bankman-Fried had a “decent­ly good shot at win­ning the entire cryp­to mar­ket,” echo­ing con­sol­i­da­tion of the finan­cial ser­vices indus­try under bank­ing mag­nate J.P. Mor­gan fol­low­ing the Pan­ic of 1907.

“I didn’t know he’d prob­a­bly win the whole cryp­to mar­ket and maybe even beyond that, because he’s try­ing to go after even gen­er­al stocks and finance now, so it’s real­ly impres­sive,” he said.

Still, Bankman-Fried’s bar­gain deals haven’t tak­en off yet. He told Bloomberg’s David Ruben­stein in August that his efforts to bail out com­pa­nies from the mar­ket down­turn had mixed results. He added that he knew some would be prof­itable while oth­ers wouldn’t, and that the com­pa­ny had to make “snap judg­ment calls.” 

More recent­ly, FTX’s ven­ture cap­i­tal arm took a 30% stake in Antho­ny Scaramucci’s Sky­Bridge Capital. 

The lat­est fund­ing round would be aimed at pow­er­ing fur­ther deals, CNBC said, cit­ing sources.

FTX had offered to bail out bank­rupt cryp­to lender Voy­ager Dig­i­tal, but its pro­pos­al was reject­ed for being a “low-ball bid.” Still, Coin­Desk report­ed the exchange is cur­rent­ly the top bid­der for Voyager’s assets.

Finan­cial doc­u­ments leaked by CNBC in August showed FTX’s rev­enue soared 1,000% to over $1 bil­lion through the bull run last year. Its oper­a­tions bought in rev­enue of about $270 mil­lion in the first quar­ter this year. 


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  • Shali­ni Nagarajan

    Block­works

    Reporter

    Shali­ni is a cryp­to reporter from Ban­ga­lore, India who cov­ers devel­op­ments in the mar­ket, reg­u­la­tion, mar­ket struc­ture, and advice from insti­tu­tion­al experts. Pri­or to Block­works, she worked as a mar­kets reporter at Insid­er and a cor­re­spon­dent at Reuters News. She holds some bit­coin and ether. Reach her at [email pro­tect­ed]

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