FTX Acquires Liquid Exchange And Its Subsidiaries

Servicing Japanese Customers

The news of the acquisition was announced via a press release on Wednesday, February 2. In addition to Liquid, FTX also acquired the exchange’s subsidiaries, including Quoine. Quione became one of the first cryptocurrency exchanges to obtain a license from Japan’s Financial Services Agency (FSA) in 2017. Later in October 2021, the platform obtained a Type 1 Financial Instruments Business registration from the FSA, enabling Quione to offer derivatives to customers.

While the economic terms of the deal have not been made public, both parties are expected to work together to service retail and institutional investors, in Japan and globally.

Meanwhile, an excerpt from the press release reads:

“Following FTX s acquisition of Liquid, Quoine will gradually integrate FTX’s products and services into its own offering, and FTX’s existing Japanese customers will be migrated to Quoine’s platform.”

The acquisition process is expected to finalize on March 30, 2022, subject to the approval of Japan’s financial regulatory bodies.

Meanwhile, this latest development is not the first time FTX and Liquid have worked together. Back in August 2021, the Japanese crypto exchange revealed that hackers had compromised its wallets to steal various cryptocurrencies such as BTC, ETH, and XRP, which were worth over $90 million at the time. Following the incident, Liquid secured a $120 million debt financing from FTX. According to Liquid, the funds would provide more liquidity for the Japanese exchange and boost its capital position. Liquid added, saying:

“The financing will also improve Liquid’s balance sheet and, in turn, its key regulatory metrics, which further corroborates its ongoing licensing opportunities in the key jurisdictions of Japan and Singapore.”

FTX Hits $32 Billion Valuation

News of the acquisition comes a few days after FTX raised $400 billion in a Series C funding round. The new capital raised the company’s valuation to $32 billion, from $25 billion recorded in October 2021.

CEO Sam Bankman-Fried said that the new funds would be used to develop additional products, while expanding the firm’s global reach so that it can better gain new licenses and regulatory approvals.

In January, the United States affiliate of the exchange platform, FTX US, raised $400 million in a new funding round, bringing the platform’s valuation to $8 billion. Interestingly, the same set of investors such as Temasek Holdings, SoftBank Vision Fund 2, Paradigm, and Tiger Global, were involved in both funding rounds.

The new funds come amid a price slump in the general crypto market. Bitcoin is down about 45% from its November price peak, with many other cryptocurrencies suffering worse downturns.

While there have been talks about the situation signalling the advent of the crypto winter, Bankman-Fried thinks otherwise. Speaking in an interview to CNBC, the FTX CEO said:

“I think we’re not entering a long term crypto winter. There have been changes in expectations of interest rates, and that’s been moving crypto markets. But it’s been moving markets more generally as well.”

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