Alameda Research and FTX combine VC operations

Sam Bankman-Fried’s investment arm of cryptocurrency exchange FTX has reportedly absorbed Alameda Research’s venture capital operations in response to the ongoing crypto bear market.

Sam Bankman-Fried’s FTX and Alameda merged their VC operations as the billionaire copes with a prolonged crypto winter https://t.co/QLyMyhKZQS

— Bloomberg Crypto (@crypto) August 26, 2022

According to a Bloomberg report on Thursday, Caroline Ellison of Alameda said in an interview that the merger took place before former co-CEO Sam Trabucco announced his resignation Wednesday, leaving Ellison as the firm’s sole CEO. FTX Ventures, the crypto exchange’s investment arm, launched in January – when the Alameda absorption was reported to have begun – with $2 billion in assets under management.

Amy Wu, who manages the VC fund, said that no payments were made as part of the deal and that Alameda’s investment arm is wholly under FTX Ventures, and the two operate independently of each other and the crypto exchange. According to Wu, the two firms were still “running distance” because the Alameda team “didn’t work very hard on the venture side day-to-day.”

In July, Voyager Digital rejected a joint offer by FTX and Alameda to purchase crypto assets and outstanding loans as part of bankruptcy proceedings. The firm’s legal team said the proposed acquisition “could hurt customers”. Alameda has made its own offerings, including supporting crypto custody company Anchorage Digital.

Ellison has reportedly said that Alameda will consider continuing to offer bailouts to crypto companies that are struggling with liquidity amid a bear market. He added, “The more systemically important someone is, the more important it will be to try to support them.”