Crypto exchange startup FTX in talks to raise up to $1 billion at about $32 billion valuation

FTX is in talks to raise up to $1 billion in fresh funding that would value the Crypto exchange giant at roughly $32 billion, according to a report from CNBC, citing people with knowledge of the matter.

The valuation remains unchanged from its February fundraise when the company secured $400M in funding from high-profile investors including Japan’s SoftBank Group Corp and Singapore’s Temasek Holdings.

The announcement comes just two weeks after its venture arm, FTX Ventures, acquired a 30% stake in New York-based global alternative investment firm SkyBridge Capital. The financial terms of the deal were not disclosed. FTX Ventures is a multi-stage venture capital firm founded in 2022 by FTX CEO Sam Bankman-Fried.

The sources, who asked not to be named because the talks are confidential, told CNBC that the negotiations for the funding are still ongoing and the terms could change. The sources also told CNBC that FTX will use some of the fresh capital infusion, on top of the $400 million round, to fuel more deal-making. An FTX spokesperson declined to comment on the story.

With crypto winter causing some casualties, Bankman-Fried, 30, has become crypto’s white knight who throws lifelines to digital asset platforms and crypto startups that faltered in recent months.

In July, FTX also gave BlockFi a $250 million revolving credit facility and on Friday announced a deal giving FTX the right to purchase it based on certain performance triggers. Bankman-Fried said the goal of the bailouts was to “protect customer assets and stop contagion from ricocheting through the system.” FTX also offered to buy bankrupt crypto brokerage Voyager Digital in August but was turned down for what was called a “low ball bid.”

“Having trust with consumers that things will work as advertised is incredibly important and if broken is incredibly hard to get back,” he said. “It does get increasingly expensive with each one of these,” Bankman-Fried said, adding that the firm still had enough cash on hand to do a $2 billion deal if necessary.

“If all that mattered was one single event, we could get above a couple billion,” he said, stressing that isn’t his preference.

On one or two occasions, Bankman-Fried, who made billions arbitraging cryptocurrency prices in Asia beginning in 2017, said he has used his own cash to backstop failing crypto companies when it didn’t make sense for FTX to do so.

“FTX has shareholders and we have a duty to do reasonable things by them and I certainly feel more comfortable incinerating my own money,” he said.

FTX was founded in 2019 by 29-year-old MIT graduate Sam Bankman-Fried and his co-founder Gary Wang. The Bahamas-based crypto exchange FTX offers derivatives products like futures and options as well as spot trading. Once an unknown startup, FTX has become a key player in the crypto space, rivaling the likes of Coinbase and Binance.

Bankman-Fried, who currently resides in Hong Kong, is now worth at least $25 billion making him the richest person in crypto, according to Forbes. Sam graduated from the Massachusetts Institute of Technology in 2013 at the age of 21. He was skilled in math and loved to solve problems and give back to society.