FTX, Alameda Research Combine Crypto VC Operations
Cryptocurrency exchange FTX absorbed the venture capital operation of Alameda Research to combine parts of billionaire co-founder Sam Bankman-Fried’s businesses as crypto prices continue to experience an ongoing decline.
It is according to a Thursday (August 25) report of Bloomberg News, citing an interview with Alameda Chief Caroline Ellison.
The report noted that while the implications of the move were small for Alameda, they are significant for the crypto startup sector. Alameda has backed more than 150 private companies, such as non-fungible token marketplace Magic Eden and crypto bank Anchorage Digital.
The transaction started in January when FTX Ventures raised $2 billion, Amy Wu – who operates fund – told Bloomberg, adding that no money changed hands between FTX and Alameda.
“The crypto exchange, the venture arm and Alameda all operate completely as separate entities Entities,” Wu said.
Read more: FTX revenue reportedly grew 10x in 2021
Alameda will mainly focus on exchange and over-the-counter trading and decentralized finance, Ellison told Bloomberg. Moving the venture capital unit to FTX should not be seen as a sign of a closer relationship between the two companies, she said.
“We are at arm’s length and receive no different treatment than other market players,” she said. “The Alameda team doesn’t work too much on the venture side on a day-to-day basis.”
Earlier this week, PYMNTS reported that FTX had $1 billion in revenue in 2021, a 1000% increase from $89 million.
See also: Today in Crypto: Voyager seeks buyers
According to Internal Finance, FTX recorded $270 million in revenue for the first quarter of this year, and would likely reach around $1.1 billion in revenue this year – although this estimate was made before the “crypto winter.”
It’s been a busy time for FTX, which recently signed a deal that gave it an option to buy lender BlockFi. The company is also in talks to buy the South Korean company Bithumb and was named as a possible buyer by the lender Voyager on Thursday.
In addition, FTX is considering expanding into stock trading, as well as increasing its efforts in retail trading. However, the internal documents show that there is still a place for “more sophisticated traders” using futures or options.
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