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3.52%Crypto Giant FTX Eyes Raising Money to Fund Acquisitions: Source
Sam Bankman-Fried’s exchange is raising capital as it considers a retail-focused deal, a person familiar with the matter said.
Updated May 11, 2023, 6:56 p.m. Published Sep 14, 2022, 7:32 p.m.
Cryptocurrency exchange FTX is raising capital in parallel with a potential acquisition, according to a person familiar with the matter.
It’s evaluating several possible takeover candidates, some of which are companies operating retail-trading platforms, the person said. Negotiations are in preliminary stages. If acquisition talks fall through, it’s less likely FTX will raise money, according to the person.
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FTX is seeking the same $32 billion valuation it was assigned the last time it raised money early this year if it does a capital raise, the person said. That stands out given the subsequent rout in crypto prices; FTX rival Coinbase (COIN) has seen its stock plummet about 70% this year.
A spokesperson for FTX declined to comment. FTX.US President Brett Harrison has previously said the exchange was on the lookout for potential acquisitions.
FTX co-founder and CEO Sam Bankman-Fried already has a tie to retail trading, personally purchasing a 7.6% stake in Robinhood (HOOD), the brokerage. Robinhood's stock price rose to the highs of the day after the CoinDesk story was published.
A takeover of a company focused on retail investors would likely bring an influx of new users to FTX, which has mostly served sophisticated traders and professionals. It has already taken steps into retail, launching its own equities trading product, FTX Stocks, earlier this year for customers in the U.S.
UPDATE (Sept. 14, 2022, at 20:16 UTC): Adds Robinhood's stock price reaction.
Tracy Wang
Tracy Wang was the deputy managing editor of CoinDesk's finance and deals team, based in New York City. She has reported on a wide range of topics in crypto, including decentralized finance, venture capital, exchanges and market-makers, DAOs and NFTs. Previously, she worked in traditional finance ("tradfi") as a hedge funds analyst at an asset management firm. She owns BTC, ETH, MINA, ENS, and some NFTs.
Tracy won the 2022 George Polk award in Financial Reporting for coverage that led to the collapse of cryptocurrency exchange FTX. She holds a B.A. in Economics from Yale College.
Ian Allison
Ian Allison is a senior reporter at CoinDesk, focused on institutional and enterprise adoption of cryptocurrency and blockchain technology. Prior to that, he covered fintech for the International Business Times in London and Newsweek online. He won the State Street Data and Innovation journalist of the year award in 2017, and was runner up the following year. He also earned CoinDesk an honourable mention in the 2020 SABEW Best in Business awards. His November 2022 FTX scoop, which brought down the exchange and its boss Sam Bankman-Fried, won a Polk award, Loeb award and New York Press Club award. Ian graduated from the University of Edinburgh. He holds ETH.
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