Asian crypto investment firm Amber Group has acquired Singaporean crypto exchange Sparrow, according to a report in The Business Times citing regulatory filings.
Amber's move is surprising as the firm faces questions about its financial health. In recent months it has undertaken significant cost-cutting efforts, including layoffs and a retreat from overseas operations in regions such as the UK and U.S.
Neither Amber or Sparrow immediately responded to requests for comment.
Amber experienced a rapid expansion last year, with its headcount peaking at about 1,100, according to Annabelle Huang, managing partner at Amber. That figure has now fallen to around 400, according to a Bloomberg report last week.
Homing on Asia
Sparrow is based in Amber's home region. The crypto exchange was founded in 2018 and has raised a total of $14.2 million, according to data from Crunchbase. It announced in August that it had obtained a Major Payment Institution license from the Monetary Authority of Singapore, which enabled the startup to provide digital payment token services in Singapore.
“Amber will continue to service our global HNW [high net worth] and institutional clients,”said Huang in a recent statement to The Block. “As our home base is in Asia, and this is where we have the most resources, it has always been our core market too.”
Founded in 2017, Amber provides a wide range of services to institutional clients, from trading and liquidity services to yield products. It recently branched into the consumer segment with its wealth management platform, WhaleFin.
Bloomberg reported today that Amber would be cancelling bonuses and reducing management salaries as part of the cost saving measures.
Amber has been in the process of trying to raise additional funds, seeking to raise $100 million at a flat valuation of $3 billion. The Financial Times reported last week that Amber had managed to secure $50 million of the $100 million, with the deal to be announced in January.
The firm denied that the $50 million raise was an emergency fundraise and said the funds came from a new investor in a previous statement to The Block. Last week, Amber had to assure customers it was “business as usual” following reports of further layoffs and paused withdrawals on some of its platforms.
To compound Amber's problems, one of the firm’s co-founders, Tiantian Kullander, known as TT, died in his sleep at the age of 30 on Nov. 23. It also owes about $130 million to Darshan Bathija, the CEO of troubled crypto lender Vauld.
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