FTX crypto exchange targets blue chip acquisitions

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Some of the world’s most prestigious financial institutions could become acquisition targets for young cryptocurrency companies, according to the 29-year-old chief executive of the FTX digital coin exchange.

Sam Bankman-Fried told the Financial Times that the company he founded in 2019 may consider buying an established financial institution such as US banking giant Goldman Sachs or trading CME Group, once it surpasses its rivals Coinbase and Binance.

“If we are the biggest exchange, [buying Goldman Sachs and CME] is not out of the question at all, ”Bankman-Fried said.

The statement highlights how tighter focus by regulators has not dampened the grand ambitions of senior executives in the rapidly growing cryptocurrency industry, where the valuations of the companies they founded a few years ago at hardly match or exceed banks with a century or more of history behind them.

For now, these ambitions remain exaggerated; FTX is seeking a valuation of around $ 20 billion in its latest funding round, Bankman-Fried told Nikkei Asia, the FT’s sister publication, in a recent interview. Goldman Sachs has a market value of nearly $ 135 billion and the CME is worth around $ 76 billion.

But rival exchange Coinbase was valued at $ 76 billion, the same amount as French banking giant BNP Paribas at the time of its public offering earlier this year, while crypto-focused payments firm Circle announced plans to register on public markets with a valuation of 4.5 dollars. billion this week.

We are fortunate not to have to [go public] because we don’t need capital

Bullish, the decentralized exchange backed by a group of billionaire investors, has announced plans to list in New York via a Spac deal valued at around $ 9 billion. Bankman-Fried said FTX has considered going public on a traditional exchange, but for now such plans are on hold.

“We are fortunate that we don’t have to because we don’t need capital. . . on the other hand, SEO has potentially big benefits, like brand recognition, ”he said. “We’re not actively looking to get listed but we want to be able to move forward if we want to.”

Bankman-Fried is worth around $ 8.7 billion, according to Forbes, from his ownership of FTX and cryptocurrency market maker Alameda Research, which he founded in 2017. He is now in a new fundraiser for an undisclosed sum.

“Mergers and acquisitions are going to be the most likely use of the funds,” he said, without naming a likely target. He told Nikkei Asia that the new capital would be spent on acquisitions aimed at targeting retail investors and expanding the company’s reach.

Unlike many crypto evangelists, Bankman-Fried asserts that traditional financial markets and digital currencies will exist in parallel, with complementary roles. Regulation is also inevitable, although it will take years for a global regulatory framework to emerge, he says.

“The biggest change we’ve seen over the past year is that crypto has grown big enough that regulators care,” he said.

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