Investment firm Proof Group may be aiming to revive the bankrupt crypto exchange FTX.
Proof Group is one of three bidders vying to reboot trading on FTX, Bloomberg said in a Monday (Nov. 6) report, citing sources familiar with the matter. Proof Group is also a member of the Fahrenheit consortium, a group of investors and crypto companies that won a bid to acquire the remains of bankrupt crypto lender Celsius Network.
Perella Weinberg Partners, the advisory firm for the FTX estate, is overseeing the potential relaunch. Bloomberg noted that Proof is one of three bidders looking to relaunch FTX, with the details of the other bidders remaining undisclosed.
Based in Silicon Valley, Proof Group is an investment firm that specializes in supporting crypto startups, Bloomberg said. Their portfolio includes successful investments in Aptos Labs, Mysten Labs and Lightspark, among others.
Following the bankruptcy filing, it was revealed that the exchange owed its top 50 creditors over $3 billion, and Bankman-Fried’s successor said he had never seen a company so poorly run and that recordkeeping had been “near zero.”
Shortly after that, the U.S. Attorney’s Office for the Southern District of New York began investigating FTX, as well as the firm’s handling of its customers’ funds while attempting to prop up its sister trading company, Alameda Research. FTX also faced an international investigation by Bahamian and Turkish regulators.
U.S. investigators also expanded their scope to include members of Bankman-Fried’s inner circle in trying to determine if the company and its leadership had intentionally committed fraud. Bankman-Fried was hit with eight counts of conspiracy and wire fraud (later reduced to seven counts) by the Department of Justice in December. In August, he was also charged with using stolen customer funds to make more than $100 million in political campaign contributions.
Bankman-Fried defended his innocence throughout the criminal trial, which began on Oct. 3 and lasted several weeks, even as others in FTX’s leadership team pleaded guilty and testified against him. Those included FTX Co-Founder Gary Wang; the exchange’s former head of engineering Nishad Singh; and one-time Alameda Research CEO Caroline Ellison, who is also Bankman-Fried’s former girlfriend.
He faces a maximum sentence of over 100 years in prison if given the full time for all counts for his starring part in orchestrating one of the largest financial frauds in American history, PYMNTS reported.