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Coinbase-backed crypto trading firm Amber Group valued at $1B

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Michael Wu, Amber Group Co-Founder and CEO joins the Yahoo Finance Live panel to discuss the latest news as the firm hits $1 billion valuation after fresh funding.

Video Transcript

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ZACK GUZMAN: Welcome back to "Yahoo Finance Live." In today's Crypto Corner, focusing in on a bit of a sell-off we have in the crypto space, as Bitcoin briefly dipped below that $30,000 level. And despite the big sell-off, companies working on the sector's infrastructure continue to raise heaps of money. And Hong Kong's crypto trading startup Amber Group is the latest proof of that. The company became the latest crypto-focused unicorn, raising $100 million in a series B funding round with backing from big names, including Tiger Global Management and China Renaissance. But that pre-money $1 billion valuation is up 10x from its series A just two years ago.

And for more on that growth, very happy to bring on the CEO and co-founder of Amber Group, Michael Wu, joining us in the wee hours of the night from Hong Kong. Appreciate you staying up for us, Mike. I want to get into kind of how you guys have been able to grow the business in just a second. But since we're seeing a pretty intense sell-off here today, maybe just focusing in on the volatility. I mean, have you seen any signs of maybe institutional investors pulling back in the enthusiasm we saw earlier in the year given the sell-off now?

MICHAEL WU: I-- that's a great question, Zack. I actually-- you know, to-- to be very straightforward, I don't think institutional investors are backing off at all. If anything, I think, you know, this probably provides a bit of timing to really, you know, assess this market in terms of its fundamentals, in terms of its infrastructure and give them a bit of time to see things more clearly, you know, after all the frenzy takes a pass, right? If you compare it to, you know, say, the fourth quarter of last year or the first quarter of this year, market was just running too much and too fast.

You know, if you are a long-term institutional investor, you probably, you know, do not want to jump all in in that kind of market and rather, you know, wait for-- for a dip or for a consolidation where, you know, you will have the time to really analyze this very young in the new asset class and to really evaluate for the long run. And from the kind of flows we see, I think, you know, that the institutional investors are still-- still, you know, adopting to this asset class, you know, step by step and everything, and that's very healthy long term for the industry.

ZACK GUZMAN: Yeah, I mean, even though we're seeing crypto crash trend on Twitter, it's worth pointing out Ether is still up 155% year to date. So just kind of putting the losses maybe in perspective at this point. But when it comes to you guys at Amber Group, interesting because I assume volatility would be good regardless for you guys if you're playing it kind of from, you know, a technical place of-- of trading and what you guys do for your clients. But also, interestingly launching the app maybe focused more on the retail consumer side last year in Q3 of 2020. So talk to me about the growth you guys are seeing in terms of what the strategy is to drive things now off that additional $100 million of fundraising.

MICHAEL WU: Sure, and thank you. I mean, for us, right, we started-- our backgrounds is more-- we started as a bunch of traders and upfronts out of Morgan Stanley, right? So everyone was a bit more on the institutional side to start with. And that was our initial client base were the hedge funds, VCs, corporates, or family offices and the like, right?

But last year, since the launch of our mobile app, the Amber app, and what we call the Products Suite, which also included the web portal and our 24/7 voice desk, we really think, you know, we have the technology, we have the ability, we have the platform to really bring the same kind of institutional grade crypto finance services to global individual customers. You know, we think this kind of one-stop integrated smart crypto finance services can be not only exclusive, right, they can be enjoyed. And an every day investor, every day trader can benefit from the same kind of services.

And, you know, that's what we've been focusing on, you know, since, I guess, the launching of the product last year. And this fundraise, you know, as you mentioned, of course, you know, it's a big milestone for us. But I really think it's more of a product rather than-- you know, it's more of a side product even of what we focus on rather than, you know, really a huge deal for us.

I mean, it will help us, you know, with the recognition and backing of all of these, you know, more well-known traditional investors. It helps, you know, bring the name more mainstream. It helps with broader crypto adoption, not just with Amber. And, you know, I think, you know, we're doing our bit for the industry in essence as well.

AKIKO FUJITA: Michael, yesterday, we saw the PBOC come out with a statement to crack down-- or really guiding the big banks as well as payment services along in cracking down on any existing loopholes for those who are currently trading crypto. And I know the crackdown right now is on the mainland, but I'm wondering how you're watching that play out and whether you are concerned that there could be a spillover effect into Hong Kong.

MICHAEL WU: Thank you for the question, Akiko. I think, you know, like you say, there are some-- I mean, crypto is a global asset, right? Crypto finance is a-- they're a global industry from day one. And therefore, you know, as crypto finance entrepreneurs, we kind of have to learn to deal with different regulations in different jurisdictions. Some of those, including mainland China, will be a bit more conservative and somewhat against crypto. Well, there are also other jurisdictions that take a much more open and welcoming stance towards the industry.

Back to your question, I think we're not overly concerned. I mean, you know, this is still a very global market, and we think this industry is still very young. There will be ups and downs, and sometimes, you know, like what we've seen recently, you know, the-- the fluctuations can come from external policy shocks. But over time, I think, you know, it's still superior technology. And superior technology will prevail eventually.

So, you know, in terms of Hong Kong or broader Asian markets, I think, you know, regulators will take a different stance. And, you know, even in the same region or same country, you know, regulators will take a different stance over time. And, you know, our approach is always, you know, we are observant, we are open-minded, but, you know, we try to innovate within the framework that's given by different regulators in different markets.

ZACK GUZMAN: Yeah, and it sounds like, you know, your institutional customers there, large hedge funds, family offices, businesses as well, I mean, are the bulk of the business right now. I wonder how much that might be coming from China versus maybe, you know, when we look at opportunities elsewhere, which ones you're keying in on, as it seems like there's quite a bit of money chasing that side of the crypto sphere in capturing some of that institutional excitement.

MICHAEL WU: Yeah, for sure. I mean, you know, I think for institutional investors, the one thing is they are also very global, right? If you are large enough, whether as a fund, as an asset manager, or as a corporate, likely you have, you know, operations or you have, you know, businesses across multiple countries. And, you know, there will be, you know, parts of the world where, you know, your business can interrupt and interact with crypto. And overall, you know, I think the global business community, right, or the global investing community overall is still very welcoming, and they're still-- a lot of them are still curious far more so and really accepting the crypto adoption.

ZACK GUZMAN: Today, today might be a little bit harder to accept it. But, of course, as we have noted over the year, still enjoying some gains there. But Michael Wu, Amber Group co-founder and CEO, congrats again on the series B. And keep us posted on the growth out there. We'll chat again soon.