Tribe Capital, a venture capital firm that invested in both the domestic and international entities of FTX, is weighing whether it should help restart the now-bankrupt cryptocurrency exchange.
In January, Arjun Sethi, the firm's cofounder, met with FTX’s committee of unsecured creditors to talk over the informal proposal, according to those familiar with the matter, reported Bloomberg. Tribe Capital discussed leading a $250 million fundraising effort, with $100 million from itself and its partners.
The price of an FTT token, the cryptocurrency once issued by FTX, jumped by almost 19% after the initial report Tuesday afternoon, according to data from CoinMarketCap.
FTX’s committee of unsecured creditors nor Tribe Capital immediately responded to a request for comment from Fortune.
“The Committee is working with the Debtors to evaluate all options to reboot or sell the FTX exchanges and create value for creditors,” FTX’s committee of unsecured creditors wrote on Twitter. “There is no definitive timetable for a reboot or sale of the exchanges at this time.”
The Committee is working with the Debtors to evaluate all options to reboot or sell the FTX exchanges and create value for creditors.
— Official Committee of Unsecured Creditors of FTX (@FTX_Committee) April 18, 2023
The report of Tribe Capital’s interest in resuscitating FTX comes after new CEO John Ray III, who has for decades led companies like Enron through bankruptcy, said in January that he was considering relaunching the exchange. He called FTX “uniquely destined to fail” during an appearance before the House Financial Services Committee.
Tribe Capital, founded in 2018, has over $1.6 billion in assets under management, including investments in prominent crypto firms like Kraken, one of the largest and oldest cryptocurrency exchanges, and Polygon Labs, the developer behind the popular blockchain protocol Polygon. Tribe Capital invested 2.6% of its deployed capital in FTX, according to The Information.
When FTX went bankrupt in November 2022, Sethi said in an interview with CNBC that at the time of its investment in the exchange “there were no red flags.”
However, after FTX’s precipitous fall, the number of red flags were glaring, enough so to warrant a slew of criminal investigations into Sam Bankman-Fried, FTX’s founder, as well as his executive management, including Caroline Ellison and Gary Wang. Ellison and Wang have since both reached plea deals with the Justice Department.
Last week, Andrew Dietderich, a lawyer for FTX, said in court that the remnants of the bankrupt exchange may use money marked to repay customers to relaunch Bankman-Fried’s defunct empire.
