- FTX and Alameda Research merge their VC operations in an effort to consolidate parts of billionaire Sam Bankman-Fried’s vast digital asset empire.
- While the implications were small for Alameda’s staffing, they could be significant for the crypto startup industry.
What happens when one of the world’s biggest cryptocurrency exchanges combines its venture capital arm with one of the world’s biggest cryptocurrency market makers?
The cryptocurrency industry is about to find out as exchange FTX and Alameda Research merge their VC operations in an effort to consolidate parts of billionaire Sam Bankman-Fried’s vast digital asset empire.
Although both FTX and Alameda Research were founded by Bankman-Fried, they have ostensibly maintained separate operations, including with regard to venture capital.
But the Crypto Winter and what appears to be an ongoing bear market in digital assets means that even the most well-funded firms will need to consolidate to better manage costs.
According to research from PitchBook, Alameda was a prolific investor that backed more than 150 private companies with portfolio including the nonfungible token marketplace Magic Eden and crypto bank Anchorage Digital.
Caroline Ellison, Alameda Research’s CEO, said that the agreement to move its venture capital unit to FTX isn’t meant to signal a closer relationship between the two companies as the market maker will focus mainly on exchange and over-the-counter trading and decentralized finance.
Meanwhile, FTX Ventures is now completely concentrated on venture investing.
The crypto exchange FTX, the venture arm FTX Ventures and Alameda Research are all independent from one another and are operating completely as separate entities.
While the implications were small for Alameda’s staffing, they could be significant for the crypto startup industry.
FTX and Alameda have worked together on deals at times in the past. Alameda and FTX made a joint cash offer to purchase all of Voyager Digital’s assets and loans, but Voyager Digital called the offer a “low-ball bid” that disrupted the bankruptcy process.
