Tribe Capital Aims to Raise $250M to Revive FTX: Details
- Tribe Capital, a San Francisco-based venture capital firm, plans to raise $250 million to restart the crypto exchange FTX, which filed for bankruptcy in 2022.
- The venture capital firm had previously invested in the troubled crypto exchange, whose founder, Sam Bankman-Fried, is facing a fraud case in the US.
- In January, the co-founder of Tribe, Arjun Sethi, met with the Committee of Unsecured Creditors to discuss an informal proposal to restart the crypto exchange.
- If the proposal passes, FTX will retain the name given to it by co-founders SBF and Gary Wang, with Wang pleading guilty to fraud in December 2022.
The collapse of crypto exchange FTX under the leadership of Sam Bankman-Fried, also known as SBF in the crypto space, wiped off $60 billion from the crypto market, and now the company has been placed under new management. Interestingly, there are plans to revive the crypto exchange by Tribe Capital, a San Francisco-based venture capital firm that had previously invested in the crypto exchange. This report comes at a time when SBF is facing a fraud case in the US.
As per the report from Bloomberg on April 18, Tribe Capital aims to raise around $250 million from outside funding to help revive crypto exchange FTX. It is also crucial to note that the firm itself will invest $100 million in partnership with its limited partners.
Moreover, as per the sources familiar with the matter, in January, the co-founder of the venture capital firm, Arjun Sethi, met with the Committee of Unsecured Creditors, formed following the collapse of the crypto exchange, to discuss an informal proposal. Furthermore, if the proposal by Tribe Capital passes and the money is raised, the exchange will retain the name given to it by co-founders Bankman-Fried and Gary Wang.
The report from Bloomberg stated that “Tribe’s proposal in January included an estimated 9 million customer accounts, including FTX US, FTX Australia, FTX Japan, FTX EU, FTX International, and LedgerX, while excluding a venture capital portfolio and crypto assets, among others.” Interestingly, the creditors are currently evaluating whether they should sell the assets or consider other options.
The Official Committee of Unsecured Creditors of FTX took to social media platform Twitter to confirm that “the Committee is working with the Debtors to evaluate all options to reboot or sell the FTX exchanges and create value for creditors” and added that “there is no definitive timetable for a reboot or sale of the exchanges at this time.”
“Until a formal process is launched, parties interested in purchasing or sponsoring a reboot of the FTX exchanges should contact the Debtors and the Committee,” said the Official Committee of Unsecured Creditors.
Another important point to mention here is that the judge in charge of overseeing the FTX bankruptcy proceedings gave the company approval to sell some of its assets to aid its efforts in repaying its creditors. Judge John Dorsey allowed the sale of four key units of FTX, i.e., the derivatives platform LedgerX, the stock-trading platform Embed, and its regional arms, FTX Japan and FTX Europe.
As reported earlier by Bitnation, the legal team representing FTX confirmed that there are plans to restart the exchange in the near future if things go smoothly. Attorneys with Sullivan & Cromwell, who represent the troubled exchange, said that the firm had recovered about $7.3 billion in liquid assets. The involvement of Tribe Capital wasn’t mentioned by the lawyers.
Furthermore, SBF’s lawyers and prosecutors recently reached an agreement that prevents SBF from accessing and using online messaging applications. Prosecutors expressed their fears that Bankman-Fried would approach key employees and executives of the exchange and influence their testimonies.