Former FTX US Head Is Raising Money for Crypto Startup

(Bloomberg) — Former FTX US President Brett Harrison is raising money for a crypto startup, according to people familiar with the matter.

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Harrison has been seeking funding to create a crypto software company for more than a month and before Sam Bankman-Fried’s FTX filed for bankruptcy, according to the people, who spoke on the condition of anonymity because the discussions were private.

Various valuations were discussed over the course of weeks, and some people familiar with the matter said they were told the fund raising target could be as high as $10 million for a $100 million valuation. Harrison declined to comment.

The Information reported Harrison’s fund raising earlier Friday, adding that he was seeking $6 million at a valuation of $60 million.

The proposed idea was for software that crypto traders could use to write algorithms for their strategies and to access different types of crypto markets, both centralized and decentralized, two of the people said.

When Bankman-Fried’s crypto exchange FTX and more than 130 related entities — including the US arm Harrison formerly led — spiraled into bankruptcy last month, customers were left reeling. Bankman-Fried has been apologizing in a series of media appearances, blaming the implosion of FTX and its sister hedge fund Alameda Research on poor risk management and lax oversight.

Bankruptcy lawyers are sorting through the wreckage for anything left of value. LedgerX, a derivatives trading platform that was a prized piece of FTX US, is preparing to make $175 million available for use in the bankruptcy proceedings, Bloomberg reported.

FTX’s collapse has shaken the broader virtual asset industry. US authorities are casting a wide net in their hunt for information about the failed exchange, asking crypto investors and trading firms that worked closely with FTX to volunteer information on Bankman-Fried and on Alameda’s former chief executive, Caroline Ellison.

Harrison’s surprise exit from FTX US came in late September, months before the public unraveling of Bankman-Fried’s empire began. At the time of his departure, Harrison had worked at FTX US for a little over a year. Earlier in his career he worked at Citadel Securities, and quantitative trading firm Jane Street, where he overlapped with Bankman-Fried.

–With assistance from Mark Tannenbaum.