Amber Group has raised only halfway through an expected $100m funding round and halted expansion plans as the Temasek-backed crypto group fears being dragged into the market turmoil caused by the collapse of FTX.
This week, crypto traders grew nervous over Amber’s outlook after industry analysts raised concerns about how FTX’s failure affected the trading shop.
The group, which has also been backed by Sequoia China and Tiger Global Management, lends tokens and manages client transactions in crypto markets. Trained by former Morgan Stanley traders, he has established high profile sponsorships with football clubs Chelsea and Atlético Madrid through his trading app WhaleFin.
The failure of the FTX exchange of Sam Bankman-Fried and Alameda Research, his trading company, is sending shockwaves throughout the industry as investors fear the contagion will spread and engulf other businesses.
Although Amber said she had no exposure to Alameda, she was an active trader on FTX and had experienced delays in processing her withdrawals. In recent weeks it has also made staff redundant, although it declined to confirm a total.
The company’s troubles came to light in the days after 30-year-old co-founder Tiantian Kullander, a former Morgan Stanley trader, died on November 23.
Amber’s office in Hong Kong was short-staffed when the Financial Times visited on Thursday. Above a piece of furniture were arrangements of faded white flowers, the color of mourning in Chinese culture.
In an interview Thursday at the group’s headquarters in Singapore, managing partner Annabelle Huang said there was “no disruption to day-to-day operations” and refuted analyst and media reports as “predatory and misinformed”. .
Amber said she has raised about $50 million from a new sovereign wealth fund, with the deal expected to be announced in January. The new capital values the company at 3 billion dollars (4 billion Singapore dollars), stable compared to February and far from the 10 billion dollars that it hoped to raise at the beginning of the year.
“I will not tell [the funding round] failed,” Huang said. “We are not under pressure to raise capital.” The crypto-finance firm would also announce a major acquisition of a Singapore-licensed business later in December, she added.
Huang said less than 10% of his trading capital was locked into FTX, but the company admitted the “fluid dynamics” of the market meant it would focus on institutional clients in Asia. Expansion plans in Europe and the United States have been put on hold while projects such as a new metaverse platform are “deprioritised”, he added. The company also confirmed that it is making “ongoing adjustments to the workforce and team composition.”
Crypto-focused hedge fund managers said they believe Amber FTX took a major hit on FTX as well as the crash of popular crypto token Luna earlier this year. “We all know Amber got burned pretty badly, especially on FTX,” an official said. Amber previously co-invested in crypto companies alongside Alameda Research, the FTX-linked fund.
Earlier this week, Web3 analytics provider Lookonchain said there had recently been large transfers from Amber to outside accounts and the group had assets of just $9.46 million. , based on a review of public blockchain records. Huang said much of his business is done in private.
An employee who said he worked for Amber Group in Shenzhen, a tech hub in southern China, said he lost his job in a series of layoffs in November, which he said saw around 60 employees lose their jobs in Shenzhen, Beijing and Shanghai.
The staff member, who declined to be identified, said the company had been laying off staff since June and the remaining employees had been asked to work from home from December 1 as the company terminated its leases of offices.
Staff, including the employee, are still awaiting full payment of a promised severance package by December 5, but have been told there is “a banking problem”. “We will take legal action to protect our rights,” the employee said.
Huang said the problem stemmed from a currency conversion issue ahead of the Chinese New Year, which is six weeks away.
The media said Amber had closed offices in China, but Huang said Amber had no entity in China and the developers building its platform were hired through a third party. However, a number of employees of Maimai, the Chinese version of LinkedIn, list Amber Group as their employer. Cryptocurrency transactions are prohibited inside the continent.
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