Cryptocurrency exchange FTX receives support from venture capital and hedge funds

Despite the recent decline in the price of Bitcoin, the cryptocurrency exchange FTX has raised the largest round of financing for digital asset startups, which shows that investor demand for the industry continues.

FTX said it raised $900 million from more than 60 investors, including venture capital firms Paradigm and Sequoia Capital, and private equity group Thoma Bravo, and valued the business at $18 billion. Last year, the last round of financing valued FTX at $1.2 billion.

Mainly for its Cryptocurrency In derivatives exchanges, FTX has risen rapidly, becoming one of the main challengers for Binance, Coinbase and other more mature markets. An FTX spokesperson said that the company’s annual revenue is close to $1 billion.

FTX, which is headquartered in Antigua and has a main office in Hong Kong, has begun to expand its business in the United States, but due to regulatory requirements, it prohibits Americans from trading on its major derivatives exchanges. Its US market FTX US provides more limited trading services.

Other investors in this round of financing include Japan’s SoftBank; Daniel Loeb’s third point; the family of hedge fund manager Paul Tudor Jones; and the head of millennium management, Iz England. FTX stated that Paradigm, fintech venture capital firm Ribbit Capital and brokerage firm BTIG helped its venture capital team with fundraising efforts. Ribbit is also an investor.

“We started as a new derivatives exchange two years ago, and this round will help us continue to build a larger and broader vision for the future of FTX,” said its CEO Sam Bankman-Fried.

The financing was carried out after the cryptocurrency trading boom in the past year, which brought investors into the industry. According to data from PitchBook, since the beginning of 2021, venture capitalists have invested $7.3 billion in nearly 670 cryptocurrency startup transactions, which has exceeded the total amount for the entire year of last year.

The company said that FTX’s revenue has increased 10 times this year, with an average daily trading volume of more than 10 billion U.S. dollars on its exchanges and more than 1 million users.Earlier this year, FTX paid US$135 million to Purchase naming rights To the basketball court of the Miami Heat.

In recent months, Bitcoin and other cryptocurrencies Fell down As global regulatory agencies step up scrutiny, especially the scrutiny of stablecoins and large exchanges. Coinbase’s share price went public in April with a market capitalization of approximately US$76 billion and has since fallen by more than 20%.

Bankman fried tell In the Financial Times this month, he regards established financial institutions such as Goldman Sachs and exchange operator CME Group as targets for final acquisitions as FTX expands.

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Forbes estimated Bankman-Fried’s net worth is US$8.7 billion. He also runs cryptocurrency Alameda Research trading company Has more than 1 billion U.S. dollars in digital assets.

Binance is an early investor in FTX, Sell ​​its shares In the company, a Binance spokesperson confirmed.The exchange recently encountered trouble Cooperate with regulatory agencies in Europe and Asia.

“The world needs a high-quality global cryptocurrency exchange that works with regulators,” said Alfred Lin, a partner at Sequoia Capital, who oversees the company’s investments in Airbnb and DoorDash. “FTX is that exchange and has the potential to become a leading financial exchange for all types of assets.”

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