Sam Bankman-Fried speaks on stage during the first annual Moonlight Concert Benefiting CARE – Children with Special Needs at Casa Cipriani on June 23, 2022 in New York City.
Craig Barrett | Getty Images
Sam Bankman-Fried’s cryptocurrency group FTX is in talks with investors to raise up to $1 billion in new funding that would keep the company’s valuation at around $32 billion, according to people familiar with the discussions.
The sources, who asked not to be identified because the talks are confidential, said negotiations are ongoing and the terms may change. Coindesk previously reported an upcoming investment at a flat valuation, following FTX’s last capital increase in January. Current investors include Singapore’s Temasek, SoftBank’s Vision Fund II and Tiger Global.
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An FTX spokesperson declined to comment.
While its competitors and peers were battered in this year’s “crypto winter,” FTX attempted to cast itself as a market consolidation company, swooping in to buy distressed assets at a discount. The company, which is based in the Bahamas, is privately owned, so it has not been hit by the collapse of Coinbase shares, which lost three-quarters of their value in 2022.
Some of the new capital, in addition to a $400 million round starting in January, will be earmarked to fuel more deals, the sources said. In July, FTX signed a deal giving it an option to buy the lender BlockFi, and the company was in discussions to acquire South Korea’s Bithumb. FTX also offered to buy bankrupt crypto broker Voyager Digital in August, but was turned down due to what it called a “low ball bid.”
Bloomberg reported in June that FTX was also trying to buy Robinhood, although Bankman-Fried, who owns a large stake in the online broker, denied that there were any active discussions underway.
CNBC reported last month, that FTX revenue rose more than 1,000% in 2021 to $1.02 billion from $89 million a year earlier, based on a leaked investor pool. FTX saw net income of $388 million last year, up from just $17 million the year before. Financial statements showed that momentum continued in the first quarter, with the company generating $270 million in revenue.
But that’s when the market was going up. Everything related to cryptocurrencies turned south in the second quarter, as rising interest rates and rising inflation in four decades drove investors out of riskier assets. Since the end of March, both bitcoin and ether have fallen by more than 60%, and many crypto-focused brokerages have been forced to liquidate.
Bankman-Fried, a former Wall Street trader, founded FTX three years ago. By continuing to raise funds and hoard assets, Bankman-Fried is betting that the cryptocurrency will bounce back and that he will be willing to reap a significant portion of the profits when that happens.
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