Venture Capitalists News Hubb
Advertisement Banner
  • Home
  • Venture Capital Market
  • Venture Capital Funding
  • Contact
No Result
View All Result
  • Home
  • Venture Capital Market
  • Venture Capital Funding
  • Contact
No Result
View All Result
Venture Capitalists News Hubb
No Result
View All Result
Home Venture Capital Funding

Galaxy Digital CEO Michael Novogratz ‘Angry’ About FTX

admin by admin
November 9, 2022
in Venture Capital Funding


Galaxy Digital is tied up in the pandemonium that hit crypto markets in recent days, which have seen FTX beset by a liquidity crisis and Binance CEO Changpeng Zhao revealing his company’s intention to buy the rival exchange. 

Galaxy’s partners have roughly $77 million of cash and digital assets with FTX, executives said during the company’s earnings call Wednesday. They added that the company had zero exposure to FTX’s native token, FTT, or to Alameda Research, a digital asset trading and venture capital investment firm founded by FTX CEO Sam Bankman-Fried.

CEO Michael Novogratz said that the company began “taking risk down Sunday night.” About $47.5 million is currently in the withdrawal process, and he noted Galaxy is “a hopeful yet cynical depositor.”

“The good news is it’s 4% of our capital, and it’s 2% of our assets,” he added. “So while it stings, it’s by no means that detrimental.”

Novogratz said he is “angry” and “frustrated” about the latest situation around FTX, which he noted was viewed as a good organization with a close relationship to regulators. Other industry players, such as Three Arrows Capital, Voyager Digital and Celsius have collapsed this year in the aftermath of the implosion of Terra’s algorithmic stablecoin.  

“In some ways, this is the year where the bad news in crypto has just kept coming,” the CEO said.

“It reminds me that this is a very young and new industry and part of the growing pains is weeding out the bad actors, the excesses, and pivoting towards something that’s more trusting,” he added.  

Zhao tweeted Tuesday that his exchange had signed a “non-binding” letter of intent to fully acquire FTX, adding that “FTX asked for our help” dealing with the liquidity crunch.

The tweet came after a partial balance sheet of FTX sister firm and asset manager Alameda Research, reported by CoinDesk last week, showed about 40% of the firm’s $14.6 billion worth of assets were attributed to FTT, the token that powers trades on FTX.

Alameda CEO Caroline Ellison rebuffed claims Sunday that the firm was on the verge of insolvency. Still, Zhao tweeted he would liquidate his firm’s substantial FTT holdings. The price of FTT subsequently tumbled, and later on, FTX halted withdrawals. 

Galaxy views FTX woes as harmful to industry regulation efforts

Novogratz said the crypto industry has done a bad job of self regulating. Crypto regulation from Washington is likely to be a slow process following FTX’s fall, as the SEC and others are bound to look into how this happened.

Bankman-Fried laid out possible crypto industry standards last month, proposing customer protection standards and a mechanism for audits to confirm stablecoins are appropriately backed by fiat.

“What’s painful about this is that Sam spent so much time in DC,” Novogratz said. “It wasn’t that what he was saying was crazy. It’s just that if the messenger now looks like he ran his ship into an iceberg…it’s just going to anger the people he spent time with and slow this down some.”  

Many crypto-related stocks took a hit Tuesday after Zhao’s tweet about potentially acquiring FTX, including Galaxy, which dropped by about 17%. 

Galaxy’s stock price was down more than 12% as of 10 a.m. ET Wednesday. The stock is down about 82% year to date.

Galaxy reports Q3 results and layoffs 

Galaxy executives said the company had a net loss of $68 million in the third quarter, which compared to a loss of $112 million and $555 million in the first and second quarters, respectively.

Despite profitability in its trading division, Galaxy suffered unrealized losses on investments in its principal investments business due to reduced valuations and had increased operating expenses for its mining business due to impairments in mining assets. 

The company retains $1.5 billion in liquidity, executives said, including $1 billion in cash.

Bloomberg reported last week that Galaxy Digital was considering cutting its workforce by about 15%.  

The reported layoffs came after CEO Michael Novogratz said during the company’s August earnings call that Galaxy intended to increase its headcount from 375 people to more than 400 staffers by the end of the year. 

Novogratz confirmed during the call that Galaxy recently downsized its workforce by 14%, as the cuts mirror a trend seen around the industry as companies seek to weather the crypto downturn.  

“It’s always painful to let people go, but I think we’ve right-sized the ship and feel good about that.”

Despite the layoffs, the company intends to increase its investment in engineering, security and legal. 

Apparently separate from the staff cuts, Damien Vanderwilt is set to step down from his role of co-president, Novogratz said. Vanderwilt, who joined Galaxy last year, is set to transition to be a senior adviser and will join the company’s board of directors.


Get the day’s top crypto news and insights delivered to your inbox every evening. Subscribe to Blockworks’ free newsletter now.


  • Ben Strack

    Ben Strack is a Denver-based reporter covering macro and crypto-native funds, financial advisors, structured products, and the integration of digital assets and decentralized finance (DeFi) into traditional finance. Prior to joining Blockworks, he covered the asset management industry for Fund Intelligence and was a reporter and editor for various local newspapers on Long Island. He graduated from the University of Maryland with a degree in journalism.

    Contact Ben via email at [email protected]





Source link

Previous Post

Meet the impressive line-up of speakers for the Indian Fintech track at TechSparks 2022

Next Post

Lighthouse spins dream returns from showcase exit as it goes raising fourth PE fund

Next Post

Lighthouse spins dream returns from showcase exit as it goes raising fourth PE fund

Recommended

Celsius Bankruptcy Investigated by Independent Examiner

5 months ago

BAYC Leads the Pack as NFT Sales Bounce Back in New Year

3 weeks ago

Uber sees few signs of customer pullback despite inflation

3 months ago

Sensex ends over 293 points lower on last trading day of 2022; Nifty declines 86 points

4 weeks ago

Q&A: Artist Refik Anadol on AI-based NFTs for Instagram

2 months ago

The Capital Quest | Advent inks fifth deal of 2022 in India with Suven Pharma

4 weeks ago

© 2022 Venture CapitaLists News Hubb All rights reserved.

Use of these names, logos, and brands does not imply endorsement unless specified. By using this site, you agree to the Privacy Policy and Terms & Conditions.

Navigate Site

  • Home
  • Venture Capital Market
  • Venture Capital Funding
  • Contact

Newsletter Sign Up.

No Result
View All Result
  • Home
  • Venture Capital Market
  • Venture Capital Funding
  • Contact

© 2022 Venture Capitalists News Hubb All rights reserved.