Amber Group Fends off Rumours Amid Lay-Offs and More

Signs of trouble are emerging at crypto unicorn Amber Group, which started in Hong Kong and is backed by big name investors including Temasek and Sequoia Capital, in the latest reminder of the risks that remain for the virtual asset industry following the collapse of FTX.

The company, which last week announced that its 30-year-old co-founder Tiantian Kullander had died suddenly in his sleep, played down the potential impact of FTX’s bankruptcy last month, saying it had no exposure to the derivatives trading firm Alameda Research or FTT, the token of FTX, and its money left on the exchange was less than 10 per cent of its trading capital. It “does not pose a threat” to business operations or liquidity, Amber Group posted on Twitter.

News of lay-offs at the firm have added to concerns about the health of the company. Former employees in Shenzhen say they have been unable to collect severance after being laid off in November without any answers from the company.

Amber Group spokeswoman Elaine Wang said in an emailed response that “rumours and false information were easy to … spread in times of chaos”, without commenting on specific questions. It is “business as usual” at the company, she said. She added that she did not have information on the company’s total trading capital.

Dozens of Amber Group employees in Shenzhen were promised severance payments on December 5, but few if any have received the money, one of the laid off workers told the Post. Chinese labour law typically requires one month of severance for each year employed.

When some former employees attempted to inquire about their compensation on Tencent Holdings’ WeChat, their messages either went unanswered or resulted in them being blocked by human resources and CEO Michael Wu, according to screenshots seen by the Post.

Wu, who co-founded the company, did not respond to questions sent on LinkedIn.

Rumours have since swirled online about the cryptocurrency trading firm, which was founded in Hong Kong in 2017 and later moved its headquarters to Singapore.

Nearly the entire industry has been impacted by the implosion of FTX, which was once the second-largest cryptocurrency exchange in the world. Losses widened for cryptocurrencies while prices had already been falling – about US$2 trillion in value has been wiped out since a peak last year.

As with so many other cryptocurrency firms, it has been a rough month for Amber Group since FTX declared bankruptcy on November 12. Kullander died 21 days later.

But troubles for the entire industry started even earlier when the collapse of Luna sent crypto prices plummeting. Amber group has been cutting staff, and Kullander told Bloomberg in September that the company had cut 5 to 10 per cent of jobs this year. Some Shenzhen staff members were notified in October that their last day would be November 15, the former employee told the Post.

On December 1, Amber Group asked all of its mainland China employees to work from home to “safeguard people’s health and safety” amid uncertainties caused by Covid-19 and virus control measures, according to a company email seen by the Post. Staff members were expected to take their work computer and personal belongings with them on December 2, according to the email.

While the Shenzhen government suggested people continue to work from home at the end of November, multiple cities started loosening testing requirements last week after widespread protests related to the country’s zero-Covid policy. On December 3, Shenzhen announced that it would end a requirement for a negative Covid-19 test results to enter public venues, including offices. It was followed by a similar policy change from the central government on Wednesday.

Amber Group managing partner Annabelle Huang first responded to rumours on Tuesday night, posting on Twitter that withdrawals were “open as usual”. The post came after cryptocurrency news outlet Wu Blockchain reported that Amber had begun to lay off hundreds of workers this month and asked Chinese employees to clear their desks.

The company must “constantly adjust and pivot” its internal teams as it “weathers through market cycles”, the company said on its official Twitter account following the report.

Amber Group employees in Hong Kong were still working on Wednesday during a visit to the company’s office in Central. Two staff members there declined to comment on the lay-offs or rumours about the company, referring the Post to the company’s public representative.

Employees also had questions after the company’s Shenzhen subsidiary Aibei Weilai Technology appointed a new company representative last month, the former employee said. Tan Xianlin replaced He Yongcheng as legal representative, according to Aibei Weilai records on Chinese corporate database QiChaCha.

Unable to reach company executives, disgruntled former employees on Monday called the Shenzhen police, who told the workers they cannot take any action yet, the former employee said.

Amber Group – which operates cryptocurrency finance services including market making, trading and asset management, and a retail-facing exchange named WhaleFin – is backed by major venture capital firms.

In addition to Sequoia and Singapore’s state-run Temasek, which wrote off US$275 million after the FTX collapse, it has multiple backers in China. China Renaissance, Fenbushi Capital and Plum Ventures have all invested in the firm. Ronald Arculli, former chairman of Hong Kong Exchanges and Clearing, was another backer.

Prior to these recent troubles, Amber Group looked ascendant. In September 2021, Wu told the Post that the company was planning for an initial public offering in 2022 or 2023.