FTX Is Raising Fresh Cash, in Part for Acquisitions

FTX Trading Ltd. founder Sam Bankman-Fried said that he’s in talks to raise fresh cash, in part to make “efficient acquisitions” amid the crypto rout.

Mr. Bankman-Fried said at The Wall Street Journal’s Tech Live conference Tuesday that he sees acquisitions as an opportunity to boost the number of retail users on the crypto exchange he founded, a consumer segment he said FTX has so far been slow to reach.

“We don’t see that much of a point in going out and trying to make an acquisition to try and get highly-engaged crypto traders. Those are people who know who we are,” Mr. Bankman-Fried said. “What we would be looking at more would be on the retail side.”

He also joked about creating a cryptocurrency inspired by cats, a reference to the launch of various dog-inspired digital currencies during the recent market boom, including dogecoin, which features the face of the Shiba Inu dog as its logo.

Mr. Bankman-Fried said he wouldn’t be focusing on pursuing the bailout-type acquisitions he made earlier this year, when he attempted to bail out two crypto lenders. Soon after, he said FTX processes far more trading volume than cryptocurrency exchange Coinbase Global Inch.,

even though FTX has only a fraction of Coinbase’s users.

Mr. Bankman-Fried said FTX was in talks with investors about raising a new funding round. In September, FTX told investors it was looking to raise an extension round at roughly the same valuation as its last financing, which valued FTX at $32 billion, according to a document viewed by the Journal. FTX US, the exchange’s US affiliate, was also raising new cash at the time at around an $8 billion valuation, the document shows.

The founder and CEO of crypto exchange FTX speaks at WSJ Tech Live about the company’s deal-making and focus on balance-sheet utilization. Photo: Nikki Richer for The Wall Street Journal

The fundraising comes at a tough moment for crypto companies, which have lost users this year amid a crash in the prices of cryptocurrencies such as bitcoin and ether. Ravi Mhatre, a partner at VC firm Lightspeed Venture Partners, said at the same panel he was spending less time investing in sectors such as decentralized finance that have seen a loss in retail interest because of plunging prices.

The two crypto bulls acknowledged that the sector has a long way to go before it can bring in more users and overcome its reputation as a hotbed for fraud and financial speculation. Mr. Mhatre said the blockchain technology powering cryptocurrencies was still “immature” and would need to become more scalable and resilient to reach mass adoption.

Mr. Mhatre and Mr. Bankman-Fried said they are unsure of when the crypto downturn would hit its bottom, though they remain optimistic about the sector’s long-term potential.

“The rate of innovation is actually quite healthy,” Mr. Mhatre said.

Write to Barber Jin at berber.jin@wsj.com

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