Brett Harrison, former president of FTX US, successfully raised funds from top cryptocurrency investors such as Coinbase Ventures and Circle Ventures after publicly blaming FTX founder Sam Bankman-Fried.
Brett Harrison has raised $5 million for his new cryptocurrency software startup from Coinbase and Circle, according to a report by Bloomberg on Friday. The news comes just days after the crypto-specialist boss lamented that his association with FTX had hampered his ability to raise funds.
This new company, called Architect, aims to build trading software to facilitate operations in centralized and decentralized cryptocurrency markets for large investors and institutions. Harrison said he hopes Architect will "give people back their confidence in trading in this industry."
The cryptocurrency software startup is scheduled to launch in Q2. Harrison said he hopes Architect will eventually be incorporated into the Coinbase Global and Circle platforms. He added that funds raised from investors will mainly be used for recruitment.
The company has an advisory board of directors that will be transformed into a formal board of directors and will contribute to the transparency of the company, according to Harrison. He also said he wanted to create a work environment that allows "people to formulate and accept criticism".
According to a report by research firm Pitchbook, venture funding for cryptocurrency startups fell 75% in the last quarter of 2022, the lowest since 2020. Indeed, in the fourth quarter of 2022, just 2.30 billions of dollars have been invested in cryptocurrency startups. Meanwhile, a record $26.7 billion was invested in blockchain startups in 2022, with the majority in the first quarter.
Beyond the record drop in cryptocurrency funding, Harrison has also struggled to raise funds due to his association with FTX. Indeed, in a lengthy Twitter thread on Saturday, he said that almost every venture capital fund he contacted had refused to invest citing the problems of SBF and FTX. Furthermore, he said:
Afterwards, many conversations ended up leading to the same kind of excuses: "We know you weren't involved in what Sam and others did, but because of FTX's bad reputation , we cannot take the risk of partnering with you, even if you are very competent or if your idea is convincing."
As reported, Harrison also revealed that he left FTX US due to deteriorating relations with Sam Bankman-Fried and his deputies over management practices.
After joining the platform in May 2021 and becoming the president of FTX US, Harrison announced his departure at the end of September 2022, less than a year after taking office. At the time of his resignation, he had not revealed the reasons for his departure from the platform, but had nevertheless declared that he would remain as an adviser within the company.