FTX’s Hong Kong backers include Blue Pool Capital, Chuang’s China Capital, Ausvic, Pulsar court filing reveals

Blue Pool, which manages the personal wealth of Alibaba co-founder Joseph Tsai, took positions in FTX in two fundraising rounds, filing reveals
The fund took 57,233 and 111,636 shares in two rounds of funding, respectively, with the value of the investments unknown

Blockchain

Xinmei Shen

Published: 10:00pm, 13 Jan 2023

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Several venture investors in Hong Kong have been exposed to the collapse of cryptocurrency exchange FTX, including Blue Pool Capital, the family office of Alibaba Group Holding’s co-founder Joe Tsai, according to a new bankruptcy court filing that revealed FTX’s previously unknown equity holders.

Blue Pool, which manages the personal wealth of Tsai, took equity positions in FTX in two fundraising rounds, including FTX Trading’s Series B-1 in October 2021 and FTX US’s Series A round in January 2022, a court filing published on January 9 shows. Alibaba owns the South China Morning Post.

The fund took 57,233 and 111,636 shares in the two rounds, respectively, with the value of the investments unknown. Blue Pool Capital was not among the leading investors in the rounds, which were led by big name venture-capital firms such as Sequoia Capital, Singapore’s state-owned Temasek and cryptocurrency-focused Paradigm. In the October 2021 round, for instance, lead investor Sequoia Capital took 572,355 shares.

Blue Pool did not immediately respond to a request for comment. Tsai is the chairman of South China Morning Post Publishers Limited, which publishes the Post.

A screen capture of Joseph Tsai, co-founder of tech giant Alibaba Group Holding, during an interview by CNBC in the United States in 2021. Photo: CNBC

FTX’s Hong Kong-based backers also include Chuang’s China Capital, Ausvic Capital and Pulsar Trading Capital, according to the court filing. The firms did not immediately respond to the Post’s requests for comment.

Days after the implosion of FTX, which was founded in Hong Kong in 2019 but left for the Bahamas in 2021, the city’s Securities and Futures Commission (SFC) said that it considered Hong Kong fund managers’ “exposure, if any, to FTX, FTT and related entities to be immaterial”.

Hong Kong Financial Secretary Paul Chan Mo-po also wrote in a post on his office’s official blog in November that Hong Kong’s virtual-asset regulations became more attractive to investors in the wake of FTX’s collapse.

The newly published list of FTX backers, however, shows that institutions in Hong Kong, a city that recently pledged to become a virtual-asset hub, are not as unscathed as regulators made them out to be.

Failed crypto giant FTX has recovered over US$5 billion: lawyer

Tsai’s Blue Pool Capital has in recent years boosted its presence in the space of cryptocurrencies and Web3, a loosely defined term referring to a next-generation internet that is based on decentralised technologies such as blockchain.

The firm invested in Hong Kong-based blockchain gaming company Animoca Brands in July 2021, and its subsidiary The Sandbox in November 2021. It is also a backer of the blockchain Polygon.

Growing regulation a bright spot in cryptocurrency’s torrid year

In December 2021, Tsai famously expressed his explicit support for the sector in a tweet that said “I like cryptocurrency”, which Binance founder Changpeng Zhao retweeted, adding “I like Joe”.

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