FTX funded a startup. Six weeks later, the money was gone, and it was forced into 'cockroach mode'

Quick Take

  • Coral raised $20 million in September, mainly from FTX. Six weeks later, it was wiped out. 
  • After cutting costs and rethinking how to make money, Coral’s in beta mode.

Last November, Armani Ferrante, who had just raised $20 million from FTX and others, was on a flight from Lisbon texting back and forth with his co-founder, trying to figure out what was going on at the exchange. No one responded as they tried desperately, like so many others, to get their money off of FTX as it imploded.

“It was just full blown panic mode,” said the former Alamada Research engineer and founder of Coral, a crypto infrastructure company. “It was like we were punched in the gut … We were just trying to stay as positive as possible and keep the team motivated and not freaking out, especially because a lot of us lost personal capital as well.”

Coral lost the entirety of FTX’s investment on the exchange, about $14.5 million. The firm had to “go into cockroach mode,” Ferrante told The Block's Frank Chaparro on The Scoop podcast. Coral also lost half of its investment from Jump because of the FTX meltdown.

They analyzed their runway and made cuts where they had to in order to stay afloat.

We had to “really prioritize like, how do we make money? How do we make it to the next round? How do we stay alive?” Ferrante said. “It was a traumatic experience on every dimension and it feels like it was forever ago. But we're here. We're here and we're still going.”

Even without the funds, Coral has succeeded in getting the xNFT protocol live and on Solana and its wallet, Backpack, on Solana and Ethereum and available for download in beta form.

Wallets galore

Backpack will join a market already brimming with wallets. But this one is more of a social wallet, said Eden Au, research director at The Block Research.


Keep up with the latest news, trends, charts and views on crypto and DeFi with a new biweekly newsletter from The Block's Frank Chaparro

By signing-up you agree to our Terms of Service and Privacy Policy
By signing-up you agree to our Terms of Service and Privacy Policy

“Most of them aren't focusing on the social aspect of it — which could be crucial for NFT communities,” Au said.

John Dantoni, also a research director at The Block Research, agreed. 

“The xNFT part goes in line with ‘being an App Store’ where you’ll be able to buy, sell, transfer and interact with applications directly inside your wallet, as opposed to current set up where you use your browser wallet and sign,” Dantoni said. 

Ferrante compares Backpack as a wallet to the way the iPhone is a phone.

With “the iPhone, you can call people, you can text people, but it's so much more than that, right? It's got this really rich application ecosystem. It's got unique developer tooling that's got this awesome, secure, heavily curated app store with incredible user experiences," he said. “We're really trying to be like the gateway into web3."

For more on Ferrante’s interview with Chaparro, listen to the full episode now.

Update: This story has been updated with additional funding information.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Authors

Christiana is a long-time journalist who has written about markets in the Americas, politicians who stashed cash in their underwear and high-end heels, to name just a few. She previously spent six years at Bloomberg, and her work has appeared in the WSJ, LA Times, Insider, Vogue Business and more. Christiana has a bachelor's degree in English from Pace University and a master's degree in journalism from New York University. She completed a master's degree in media psychology for fun.
Frank Chaparro is the Editor At Large at The Block. Chaparro started his career at Business Insider, where he specialized in the intersection of digital assets and Wall Street, market structure, and financial technology. Soon after joining Business Insider out of Fordham University, Chaparro was interviewing top finance and tech executives, including billionaire Mark Cuban, “Flash Boys” star Brad Katsuyama, Cboe Global Markets CEO Ed Tilly, and New York Stock Exchange President Tom Farley. In 2018, he become a sought after reporter in the crypto world, interviewing luminaries such as Tyler Winklevoss, the cofounder of Gemini, Jeremy Allaire, the CEO of Circle, and Fundstrat head Tom Lee. He runs his own podcast The Scoop and writes a biweekly eponymous newsletter. He leads special projects, including The Block's flagship podcast, The Scoop. Prior to The Block, he held roles at Business Insider, NPR, and Nasdaq. For inquiries or tips, email [email protected].


To contact the editor of this story:
Larry DiTore at
[email protected]