 | Get all the essential market news and expert opinions in one place with our daily newsletter. Receive a comprehensive recap of the day's top stories directly to your inbox. Sign up here! |
(Kitco News) -
Venture capital firm Tribe Capital, which invested in FTX prior to its collapse, is once again considering rebooting the bankrupt crypto exchange, according to a Bloomberg report published Tuesday.
In January, Tribe co-founder Arjun Sethi met with the committee representing FTX’s unsecured creditors “to discuss the informal proposal, according to people familiar with the matter” who are involved in the talks but asked not to be identified. The January proposal was for “an estimated 9 million customer accounts, FTX US, FTX Australia, FTX Japan, FTX EU, FTX International and LedgerX,” but did not include the exchange’s venture capital portfolio or crypto assets.
According to the report, Tribe is considering raising $250 million for the new initiative, including $100 million from its own funds and those of limited partners. The venture firm has over $1.6 billion in AUM, invested in the first iterations of both FTX and FTX US, and also backed the Kraken crypto exchange.
It’s not clear which brands and subsidiaries would be included in Tribe’s new proposal, as the judge presiding over the bankruptcy approved FTX’s request to auction off four of the solvent companies in the FTX group by the end of March 2023. FTX Europe, FTX Japan, Embed Technologies, and LedgerX were approved for auction after the exchange’s lawyers claimed there was a strong market for the subsidiaries, but the potential loss of licenses and employees could destroy their value if they waited much longer.
FTX attorney Andrew G. Dietderich told the bankruptcy court last week that they are still “in the early stages of assessing the idea,” and that any restart of the exchange would require “a significant amount of cash.” John Ray, FTX’s new chief executive officer, is expected to decide on the feasibility of a restart of FTX at some point before the end of June.
Shortly after the story broke, FTX’s committee of unsecured creditors posted a series of tweets addressing the possible reboot. “The Committee is working with the Debtors to evaluate all options to reboot or sell the FTX exchanges and create value for creditors,” they wrote. “There is no definitive timetable for a reboot or sale of the exchanges at this time.”
They added that until a formal sale or reboot process is launched, interested parties should contact the Debtors and the Committee.
Following the publication of the Bloomberg report, FTT, the native token of the FTX exchange, jumped from $1.90 to $2.26 in 25 minutes. At the time of writing, FTT was trading at $2.08.
FTX and all of its subsidiaries, along with sister hedge fund Alameda Research, filed for bankruptcy on Nov. 11, 2023. The former founder and CEO, Sam Bankman Fried, faces a criminal trial for his role in the bankruptcy scheduled to begin on October 2, 2023.
