Major crypto exchange FTX is holding discussions with potential investors regarding a funding round worth up to $1 billion. This is to allow the firm’s January 2022 valuation of about $32 billion to stay in line with previous financing from earlier this year.
The exchange hopes that new funding would enable FTX’s valuation at the pre-downturn level, persons with knowledge of the talks told CNBC, while the company has declined to officially comment on the ongoing development. Some of the exchange’s existing investors comprise Singapore’s Temasek, Lightspeed Venture Partners, SoftBank’s Vision Fund 2, Insight Partners, and Tiger Global Management, among others.
Since the beginning of the current downturn, FTX has attempted to position itself as the crypto market’s consolidator, purchasing distressed assets at a discount. Based in the Bahamas, the firm is privately held which enabled it to avoid the stock meltdown suffered by a number of its major competitors.
Meanwhile, earlier this month, the exchange’s CEO and co-founder Sam Bankman-Fried (SBF) disclosed that his firm has built an estimated $1 billion war chest to continue deploying capital to bail out distressed crypto firms and buy their assets.
While he declined to state the specific amount, the entrepreneur noted that FTX is still within its comfort zone regarding the amount of funds it intends to spend without emptying its coffers.
“You have the issue of ‘how much do we feel comfortable deploying.’ Saying there’s another part billion here that is completely unencumbered will get you within a factor of too certain of the right answer,” he said.
Article source: Crypto News