Temasek-backed Amber Group buys regulated crypto platform Sparrow Exchange

TEMASEK-BACKED Amber Group, which is in the middle of major cost-cutting, has acquired crypto platform Sparrow Holdings.

Amber fully bought the entity, which is known in the industry as Sparrow Exchange, on Nov 29, regulatory records in Singapore showed.

Sparrow Holdings is the holding company that owns licensed entity Sparrow Tech.

Amber declined to comment.

The acquisition comes amid a turbulent time for Amber, which is among digital asset companies caught up in the market turmoil caused by a collapse in crypto prices and a string of scandals.

In recent weeks, Amber has had to fend off assertions that the company has taken significant impact from the blow-up of crypto exchange FTX.

Amber has laid off staff and is set to slash its workforce to fewer than 400 from about 700, Bloomberg reported, citing sources. The company is terminating a sponsorship deal with football club Chelsea FC, the report added.

A Singapore-based crypto trading and lending platform, Amber was last valued at US$3 billion in a February funding round. It reportedly put a US$100 million fundraising on hold due to unfavourable sentiment.

The company was founded by former Morgan Stanley traders, one of whom died last month: 30-year-old Tiantian Kullander.

Amber’s managing partner Annabelle Huang told the Financial Times there was “no disruption to daily operations” and dismissed media and analyst reports as “predatory”. In an interview published on Dec 9, she said the company has raised about US$50 million and will reveal the acquisition of a licensed business in Singapore this month.

Sparrow announced receipt of its major payment institution licence from the Monetary Authority of Singapore (MAS) in August, which allows it to provide digital payment token services.

The startup, whose investors include crypto-focused Signum Capital and real estate investor Gain Loyal, operates an options trading platform and offers other digital asset products and solutions.

These include enabling PayNow transactions for institutional and high-net-worth clients who buy and sell cryptocurrencies using fiat on its trading platform. Sparrow also works with financial institutions and family offices to design bespoke digital asset solutions.

Sparrow Tech booked a net loss of US$2 million and revenue of US$5.8 million for the year ended Dec 31, 2021, according to data platform Handshakes. It had assets of US$171.8 million against US$162.5 million in liabilities.