Amber Group has raised just half of a planned $100 million funding round and halted expansion plans as the Temasek-backed crypto group battles concerns it will be dragged into market turmoil sparked by the collapse of FTX.
crypto This week, traders became nervous about the prospect of Amber after industry analysts raised concerns about how the FTX glitch affected the trading shop.
The group, which is also backed by Sequoia China and Tiger Global Management, lends tokens and handles customer transactions on crypto markets. Founded by former Morgan Stanley traders, it has established high-profile sponsorships with soccer clubs Chelsea and Atlรฉtico de Madrid through its WhaleFin trading app.
The failure of Sam Bankman-Fried FTX The Exchange and Alameda Research, its trading firm, is causing upheaval throughout the industry, and investors are worried the contagion will spread and engulf other companies.
While Amber said he had no exposure to Alameda, he was an active trader on FTX and had experienced delays in processing his withdrawals. In recent weeks she has also laid off staff, although she has not wanted to confirm a total.
The company's problems came to light in the days after co-founder Tiantian Kullander, 30, a former Morgan Stanley trader, died on Nov. 23.
Amber's Hong Kong office was understaffed when the Financial Times visited it on Thursday. On top of a cabinet were arrangements of faded white flowers, the color of mourning in Chinese culture.
In an interview Thursday at the group's Singapore headquarters, managing partner Annabelle Huang said there were "no disruptions to day-to-day operations" and refuted analyst and media reports as "predatory and misinformed."
Amber said she had raised about $50 million in funding from a new sovereign wealth fund, and the deal will be announced in January. The new capital values โโthe company at $3 billion, the same as in February and a far cry from the $10 billion she expected to raise at the start of the year.
"I wouldn't say [the funding round] it was unsuccessful,โ Huang said. โWe are not under pressure to raise capital.โ The crypto finance firm will also announce a major acquisition of a licensed business in Singapore this month, he added.
Huang said less than 10 percent of his trading capital was locked up in FTX, but the company admitted that the "fluid dynamics" of the market meant it would focus on institutional clients in Asia. Plans to expand in Europe and the US have been frozen, while projects like a new metaverse platform are being "deprioritized," he added. The company also confirmed that it was making "continuous adjustments to the roster and team composition."
Crypto-focused hedge fund managers said they believed Amber took a significant hit from the collapse of FTX and the popular Luna crypto token earlier this year. โWe all know Amber got burned out pretty bad, especially at FTX,โ said one manager. Amber has previously invested in crypto companies alongside Alameda Research, the fund linked to FTX.
Earlier this week, Web3 analytics provider Lookonchain said that there had been large transfers from Amber to external accounts recently and that the group had assets of just $9.46 million, according to a review of public blockchain records. Huang said much of his business was done in private.
An employee who said he worked for Amber Group in Shenzhen, a technology hub in southern China, said he lost his job as part of a round of cuts in November, in which he estimated some 60 employees lost their jobs in Shenzhen, Beijing and Shanghai.
The staff member, who declined to be named, said the company had been cutting staff since June and the remaining employees had been told to work from home since December 1 as the company had terminated contracts. office lease.
Staff, including the clerk, are still waiting for a promised severance pay to be paid in full by December 5, but were told there was "a banking problem." โWe will take legal action to safeguard our rights,โ the employee said.
Huang said the problem stemmed from a currency conversion problem before the Lunar New Year holiday, which is six weeks from now.
Media reports said Amber had closed offices in China, but Huang denied it had any entities in China, saying the developers building its platform were contracted through a third party. However, several employees at Maimai, the Chinese version of LinkedIn, list Amber Group as their employer. Cryptocurrency transactions are prohibited within the continent.
