SAN FRANCISCO - Embattled crypto firm Amber Group has raised US$300 million (S$408 million) mainly for customers who lost money on the platform’s products due to FTX’s implosion, according to co-founder and chief executive officer Michael Wu.
Amber, a crypto trading and lending platform, had planned to raise US$100 million at a US$3 billion valuation in multiple parts, but changed tack once Sam Bankman-Fried’s FTX exchange blew up, Mr Wu said in an interview.
“We made a quick decision to basically pause that previous round,” he said, adding that the new Series C round is being led by venture capital firm Fenbushi Capital US. The valuation is lower than the US$3 billion achieved in February, Mr Wu said, while declining to give an exact number.
Fenbushi Capital did not immediately reply to an e-mail seeking comment.
Singapore-based Amber had less than 10 per cent of its overall trading capital on FTX when the exchange collapsed into bankruptcy.
That proportion has since expanded as Amber’s overall trading volume has shrunk, according to Mr Wu.
The company is cutting costs as it goes back to its roots of supporting only institutional and wealthier clients, according to Mr Wu. He said Amber’s workforce will shrink to around 300 people, which was the size of its headcount at the end of 2020 and early 2021.
At its peak, Amber had more than 1,000 employees at the end of the second quarter and early in the third quarter of 2022, according to Mr Wu.
Crypto platforms are trying to assuage customer worries as contagion ripples out from FTX. Firms like BlockFi, now in bankruptcy, Blockchain.com and Blockstream recently sought to raise funds at lower valuations, reflecting tough market conditions and plunging interest from venture capitalists.
Amber’s troubles have included dragged-out layoffs, bonus suspensions and salary reductions among management. The company also shut down its retail customer operations and ended a sponsorship deal with Chelsea FC.
When asked if Amber would be terminating a partnership with Atletico de Madrid – where the logo of the company’s WhaleFin trading platform appears on the front of the football team’s jersey – Mr Wu declined to comment specifically on the deal, but noted Amber was “reducing all marketing efforts”.
He said the company is still operating and that the majority of the US$300 million funding will go to its institutional and high-net-worth clients who invested in products that used FTX – an example of the latter is a product that sought to exploit arbitrage opportunities between different exchanges.
Retail customers were unable to invest in these types of products through Amber, Mr Wu added.
He said he is confident in Amber’s long-term prospects.
“Going into next year, I do believe we will be one of the very few large crypto services companies remaining.”
Amber’s backers include Temasek and Sequoia China. It was launched in 2018 by a group of founders that included former Morgan Stanley traders. One of its founders, Mr Tiantian Kullander, passed away unexpectedly at the age of 30 in November.
Crypto markets are nursing heavy losses, hurt by rapidly tightening monetary policy and a series of blow-ups. A gauge of the top 100 digital assets has shed more than 60 per cent so far this year. REUTERS
