(Bloomberg) -- Embattled crypto firm Amber Group has raised $300 million mainly for customers who lost money on the platform’s products due to FTX’s implosion, according to co-founder and and Chief Executive Officer Michael Wu.

Amber, a leading crypto trading and lending platform, had planned to raise $100 million at a $3 billion valuation in multiple parts, but changed tack once Sam Bankman-Fried’s FTX exchange blew up, Wu said in an interview.

“We made a quick decision to basically pause that previous round,” he said, adding that the new Series C round is being led by venture capital firm Fenbushi Capital US. The valuation is lower than the $3 billion achieved in February, Wu said, while declining to give an exact number.

Fenbushi Capital didn’t immediately reply to an email seeking comment.

Singapore-based Amber had less than 10% of its overall trading capital on FTX when the exchange collapsed into bankruptcy. That proportion has since expanded as Amber’s overall trading volume has shrunk, according to Wu. 

The company is cutting costs as it goes back to its roots of only supporting institutional and wealthier clients, according to Wu. He said Amber’s workforce will shrink to around 300 people, which was the size of its headcount at the end of 2020 and early 2021. 

Crypto platforms are trying to assuage customer worries as contagion ripples out from FTX. Firms like BlockFi Inc. — now in bankruptcy — Blockchain.com and Blockstream recently sought to raise funds at lower valuations, reflecting tough market conditions and plunging interest from venture capitalists.

Amber’s troubles have included dragged-out layoffs, bonus suspensions and salary reductions among management. The company also shut down its retail customer operations and ended a sponsorship deal with Chelsea FC. 

When asked if Amber would be terminating a partnership with Atletico de Madrid — where the the logo of the company’s WhaleFin trading platform appears on the front of the soccer team’s jersey — Wu declined to comment specifically on the deal, but noted Amber is “reducing all marketing efforts.”

He said the company is still operating and that the majority of the $300 million funding will go to its institutional and high-net-worth clients who invested in products that used FTX — an example of the latter is a product that sought to exploit arbitrage opportunities between different exchanges.

Retail customers were unable to invest in these types of products through Amber, Wu said. 

Long-Term Prospects

At its peak, Amber had more than 1,000 employees at the end of the second quarter and early in the third quarter of this year, according to Wu. He said he’s confident in Amber’s long-term prospects.

“Going into next year, I do believe we will be one of the very few large crypto services companies remaining,” he said. 

Amber’s backers include Temasek Holdings Pte and Sequoia China. It was launched in 2018 by a group of founders that included former Morgan Stanley traders. One of its founders, Tiantian Kullander, passed away unexpectedly at the age of 30 in November.

Crypto markets are nursing heavy losses, hurt by rapidly tightening monetary policy and a series of blowups. A gauge of the top 100 digital assets has shed more then 60% so far this year.

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--With assistance from Suvashree Ghosh.

©2022 Bloomberg L.P.