FTX is reportedly in talks with a group of traditional finance heavyweights to raise up to $1 billion in new funds to drive more deals.
The fresh capital injection, which is still being negotiated, would keep the crypto conglomerate at the same valuation it received after a $400 million funding round in January. At the time, the cryptocurrency exchange founded by Sam Bankman-Fried was valued at $32 billion.
Participants in the upcoming round would include existing investors such as Singapore’s Temasek, SoftBank’s Vision Fund 2 and Tiger Global.
Sam Bankman-Fried has tried to help the struggling crypto industry with many bailouts of troubled companies announced this year to pull them back from the brink.
The crypto billionaire-turned-savior of the digital asset industry is reportedly in talks to acquire big names in both the crypto and brokerage industries. These include struggling crypto lender BlockFi, South Korean exchange Bithumb, and most recently Robinhood. Bankman-Fried’s quantitative research firm Alameda Research also came to the rescue of the embattled Voyager Digital.
According to leaked financial documents, global trading revenue generated by FTX reached $1.02 billion in 2021 after more than tenfold increase from 2020’s $89 million. Additionally, FTX’s operating income fell from $14 million to $272 million a year earlier during last year’s bull run. FTX made $388 million in net income last year, up from just $17 million in 2020.
The CNBC report also states that strong momentum from 2021’s first-quarter revenue of $270 million continued in Q1. However, it was unclear how FTX held up in Q2 as prices fell and crypto platforms struggled to maintain momentum during the recent “crypto winter.”
For comparison, Coinbase reported a loss of $1.1 billion on revenue of $803 million in the second quarter of 2022. The results amounted to the second straight quarterly loss for the publicly traded exchange, which reported $7.4 billion in revenue and $3.6 billion in net income last year.
FTX US also made headlines earlier this year when the exchange became an investor in the New York City-based IEX Group, the eighth largest exchange operator in the world. The startup made a bet and made a strategic investment in the Flash Boys exchange as it aims to leverage its expertise and infrastructure to create a regulated marketplace for buying, selling and trading securities of digital assets .