FTX fast growing cryptocurrency exchange According to the firm’s chief executive officer, FTX is willing to spend billions of dollars to buy shares in other companies in order to expand the suite of products it offers clients. On Friday, billionaire and co-founder Sam Bankman-Fried stated that recent rounds of fundraising by FTX and its US business — totaling more than $2 billion — could be used to fund the transfers.
“FTX is a profitable company,” he said in an interview. “You can look at the amount that we’ve raised over the last year or two — it’s a few billion dollars. That gives maybe a sense of where we are in terms of cash that was explicitly viewed from a potential acquisition angle.”
Bankman-Fried, 30, has become one of the most well-known figures in the cryptocurrency world. With Super Bowl advertisements, naming rights to the Miami Heat’s home court, and its insignia on Major League Baseball umpire jerseys, FTX broke into the mainstream. FTX has lately made ripples in traditional financial circles with a strategy that could eliminate the need for brokerages to clear various derivatives.
FTX’s war chest is overflowing with cash for deal-making. The exchange raised $400 million in January at a valuation of $32 billion, bringing the total amount raised in the first half of the year to close to $2 billion. At the same time, its US subsidiary raised $400 million on its own.
FTX does not need to buy new companies to grow, according to Bankman-Fried, but the company has already gone on a spending spree.
To build a presence in the US crypto derivatives market, the American arm purchased LedgerX, a Commodity Futures Trading Commission-regulated exchange and clearinghouse, last year. FTX purchased a large share in IEX Group Inc., the company behind the stock-trading platform made famous by “Flash Boys,” in April. Bankman-Fried said earlier this month that he had purchased a 7.6% interest in Robinhood Markets Inc.
Additional acquisitions are “always something we’re going to be open to and keeping our ears to the ground on,” Bankman-Fried added. One of FTX’s goals is to be able to offer more goods to investors, including the ability to trade equities, so they don’t have to travel elsewhere for those services, he added.
Companies with large user bases or teams with significant knowledge and expertise in areas where FTX is lacking can be appealing acquisition candidates, according to him. And sometimes it’s just logical from an economic standpoint, he added. “Sure, if it’s inexpensive.”
According to the crypto executive, the latter was a major factor in his recent Robinhood investment. The brokerage’s stock had plunged nearly 90% from its peak of $85 per share in August when he bought it.
According to him, FTX’s aspirations necessitate a significant amount of time spent dealing with Washington regulators, and he has been visiting the US capital virtually every other week.
While Bankman-Fried said his company is working with the Commodity Futures Trading Commission and the Securities and Exchange Commission as it extends its market services, FTX is not aiming to apply for a federal bank license, as some crypto companies have done.
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