FTX in talks to raise $1 billion at a valuation of around $32 billion

FTX in talks to raise $1 billion at a valuation of around $32 billion

Sam Bankman-Fried speaks onstage during the First Annual Moonlight Gala to Benefit CARE – Children With Special Needs at Casa Cipriani on June 23, 2022 in New York City.

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Sam Bankman-Fried’s crypto conglomerate FTX is in talks with investors to raise up to $1 billion in new funding that would keep the firm’s valuation at about $32 billion, according to people with knowledge of the discussions.

Negotiations are ongoing and terms could change, said the sources, who asked not to be named because the talks are confidential. Coindesk previously reported an upcoming investment at a flat valuation, following FTX’s latest capital raise in January. Existing investors include Singapore’s Temasek, SoftBank’s Vision Fund 2 and Tiger Global.

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An FTX spokesman declined to comment.

While its rivals and peers have taken a beating in this year’s “crypto winter,” FTX has tried to market itself as the market consolidator, swooping in to buy distressed assets at a discount. The Bahamas-based company is privately owned, so it has not suffered from the collapse of Coinbase shares, which have lost three-quarters of their value by 2022.

Some of the fresh capital, on top of January’s $400 million round, would go to fuel more deals, the sources said. In July, FTX signed a deal giving it the option to buy out lender BlockFi, and the company was in talks to acquire Bithumb from South Korea. FTX also offered to buy bankrupt crypto brokerage Voyager Digital in August, but was turned down for what was called a “low bid.”

Bloomberg reported in June that FTX was also trying to buy Robinhood, although Bankman-Fried, which owns a significant stake in the online broker, has denied that there are any active talks underway.

FTX revenue soared more than 1,000% in 2021 to $1.02 billion from $89 million a year earlier, CNBC reported last month, according to a leaked investor platform. FTX had net income of $388 million last year, up from $17 million the year before. The momentum continued in the first quarter, as the company made $270 million in revenue, financials showed.

But that’s when the market soared. All things cryptocurrency took a southerly turn in the second quarter as rising interest rates and a four-decade high in inflation drove investors out of riskier assets. Since the end of March, both bitcoin and ether have declined by more than 60%, with numerous crypto-focused brokerages forced to liquidate.

Bankman-Fried, a former Wall Street quant trader, founded FTX three years ago. By continuing to raise money and acquire assets, Bankman-Fried is betting that cryptocurrencies will rebound and that he will be ready to capture a big chunk of the profits when it does.

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