Consequences of bankruptcy: After FTX bankruptcy: Crypto company Amber Group abandons sponsorship deal for Chelsea | news

• At the beginning of 2022, the Amber Group was able to collect 200 million US dollars in a financing round
• In the wake of the FTX bankruptcy, the Amber group is apparently planning major restructuring
• These include breaking a sponsorship deal with Chelsea, sacking 40 per cent of the workforce and restructuring the target audience

Asian crypto platform Amber Group has pledged around $25m (£20m) to support Chelsea FC this season – in exchange for the 2022-2023 players wearing the trading platform’s WhaleFin logo on their shirts. Amber Group and Chelsea agreed in May after the startup, founded in 2018, raised $200 million in a funding round in February and was valued at $3 billion, Bloomberg reports. According to CoinDesk, supporters of Amber Group include major venture capital firms such as Sequoia and Temasek.

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Amber Group rejects any speculation as early as December

After the $2 billion FTX bankruptcy rocked the crypto industry in November and forced several major companies to file for bankruptcy, there was speculation on social media about whether the risk of contagion could also spread to the Amber group. As recently as December 6, Amber manager Annabelle Huang assured on Twitter that the company would continue to conduct business as usual. By then, however, Amber Group had already laid off a large number of employees at short notice and halted an ongoing funding round that was meant to raise $100 million, according to Bloomberg, citing information from an anonymous person familiar with the matter.

In addition to the end of the Chelsea deal, further far-reaching changes await

The job cuts and the end of the Chelsea sponsorship deal are part of a wider cost-saving strategy, the anonymous source told Bloomberg. The aim is to lay off about 300 of the 700 employees, to move to a cheaper office in Hong Kong and to send employees to smaller offices in other regions to work from home permanently. According to the South China Morning Post, dozens of employees were reportedly laid off in November and have not received their severance pay as of early December. According to the anonymous Bloomberg source, a complete restructuring of the Amber Group is also part of the savings strategy. From now on, there will be a major focus on large institutions, family businesses and wealthy investors, and work with smaller clients will be reduced. As a result, the customer base will be reduced from hundreds of thousands of investors to around 100, it says.

It is yet to be seen whether the Amber group can avoid bankruptcy in this way and implement a new business strategy. Exactly how the restructuring is to be carried out and what it means for the individual customers is unclear.

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