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Tribe Capital, a venture capital firm founded in 2018, is reportedly thinking about taking a leadership role in a funding round worth $250 million aimed at helping FTX reboot its cryptocurrency exchange. The idea to restart the operation has been floating around since the company filed for bankruptcy, but its current CEO, John J. Ray III has only recently signaled it is being seriously considered.
Tribe Capital Eying New Investment in FTX
According to a report from Tuesday, April 18th, a venture capital firm called Tribe Capital is interested in supporting FTX’s potential rebooting of its exchange. The company is allegedly considering a $250 million funding round anchored by $100 million from itself. The company invested in FTX and FTX.US prior to their collapse and has supported other cryptocurrency firms like Kraken in the past.
The idea to restart FTX’s operations started floating around shortly after the original Chapter 11 bankruptcy filing in November. It was initially pitched by Sam Bankman-Fried in several interviews he gave prior to his arrest in the Bahamas in December 2022. It gained some legitimacy early in 2023 when FTX’s current CEO, John J. Ray III revealed he is also considering it.
Last week, the rebooting of FTX again became a hotly debated topic that sent the company’s FTT token surging after an extended period of inactivity as Ray revealed that he is planning to reach a decision in the second quarter of this year. Despite these developments, the idea remains contested as many believe that FTX’s name has been too tarnished to allow for a successful reopening.
The FTX-Caused Acquisitions and Rescue Investments
Considering FTX’s size and its interconnectedness with other cryptocurrency companies, it is hardly surprising that its downfall caused a significant contagion. Over the months, the effect became evident throughout various digital assets-related sectors including several pundits. For example, the popular outlet The Block was forced to undergo a leadership change after it was revealed that its previous CEO received money from Sam Bankman-Fried.
Barry Silbert Digital Group was also significantly impacted by the collapse. One of its subsidiaries, Genesis, was forced into bankruptcy and is to be sold as part of an agreement with creditors of which the Gemini Trust is probably the most well-known. The DCG even reportedly received several acquisition offers for another subsidiary—CoinDesk.
Through its partnership with Genesis, the Winklevoss twins’ Gemini has also been impacted by the collapse of FTX. The turmoil forced the closing of its Earn program, and, more recently, it was revealed that the twins were forced to inject $100 million of their own wealth into the cryptocurrency firm after allegedly failing to secure outside funding.
Do you think Ray will decide to reboot the FTX exchange? Let us know in the comments below.