FTX and Alameda Merge Venture Capital Operations

Cryptocurrency exchange FTX acquired Alameda Research’s venture capital operations in an effort to consolidate parts of billionaire Sam Bankman-Fried’s empire as it deals with a prolonged decline in cryptocurrency prices.

In an interview, Alameda Chief Executive Officer Caroline Ellison explained the change, which had not previously been reported. The transition occurred before Ellison’s co-CEO, Sam Trabucco, announced this week that he would step down and become an advisor.

Brian Lee, a former partner at Alameda Research Ventures, now works at FTX Ventures, the crypto exchange’s startup investment arm.

While the implications for Alameda’s staffing were minor, they were significant for the crypto startup industry. According to PitchBook research, Alameda was a prolific investor who supported more than 150 private companies. Magic Eden, a nonfungible token marketplace, and Anchorage Digital, a crypto bank, are among its holdings.

The transition began in January, when FTX Ventures raised $2 billion, according to Amy Wu, the fund’s manager. She stated that no money was exchanged between FTX and Alameda. FTX Ventures now handles all venture capital investments. According to Wu, the crypto exchange, the venture arm, and Alameda are all separate entities. “All three are operating completely as separate entities.”

According to its website, Sam Bankman-Fried, the founder and CEO of FTX, is one of six “investors” in FTX Ventures, along with Wu, Lee, Adam Jin, and Ramnik Arora. Arora is the product manager at FTX.

The two companies, FTX and Alameda, have previously collaborated on transactions. In June, Alameda offered Voyager Digital LLC, a crypto lender, and trading platform, a $485 million loan, but the lifeline wasn’t enough to keep the company from going bankrupt. Alameda and FTX made a joint cash offer to buy all of Voyager’s digital assets and loans, but Voyager dismissed the offer as a “low-ball bid” that jeopardized the bankruptcy process.