Defying Crypto Doom: Tribe Capital's $250M Plan To Save FTX, Will It Work?

Venture capital firm Tribe Capital is considering whether to aid in the revival of the now-defunct cryptocurrency exchange FTX FTT/USD, in which it previously invested.

What Happened: In January, Tribe Capital co-founder Arjun Sethi met with FTX's committee of unsecured creditors to discuss a preliminary proposal, reported Bloomberg.

The venture capital firm contemplated spearheading a $250 million fundraising campaign, contributing $100 million from its own funds and partners.

Following the initial report on Tuesday afternoon, the value of FTT tokens, previously issued by FTX, rose nearly 19%, according to CoinMarketCap data.

The committee of unsecured creditors tweeted, "The Committee is working with the Debtors to evaluate all options to reboot or sell the FTX exchanges and create value for creditors. There is no definitive timetable for a reboot or sale of the exchanges at this time."

FTX's new CEO John Ray III, who has guided companies such as Enron through bankruptcy, mentioned in January that he was contemplating relaunching the exchange.

Ray described FTX as "uniquely destined to fail" during a House Financial Services Committee appearance.

Tribe Capital, established in 2018, manages more than $1.6 billion in assets, including investments in leading crypto firms such as Kraken and Polygon Labs.

See Also: Taylor Swift Managed To Dodge The FTX Promo Bullet, Says Lawyer — And Elon Musk Isn't Surprised

Why It Matters: FTX represented 2.6% of Tribe Capital's deployed capital, according to The Information.

When FTX declared bankruptcy in November 2022, Sethi told CNBC that there were "no red flags" at the time of the company's investment.

Following FTX's collapse, numerous red flags emerged, leading to criminal investigations into the exchange's co-founders Sam Bankman-Fried and Gary Wang, and top executive Caroline Ellison.

Ellison and Wang have both reached plea deals with the Justice Department.

Andrew Dietderich, an attorney for FTX, stated in court last week that the residual funds of the bankrupt exchange might be utilized to revive the defunct enterprise instead of repaying customers.

Read Next: Panic In Crypto Land: Bitcoin Dives, Ethereum Sinks, Altcoins Crumble — 4 Experts On The Path Ahead

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