Coinbase Explores FTX Europe Entry via Derivatives Branch Acquisition

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Key takeaways: 

  • Coinbase explored the possibility of acquiring FTX Europe after the exchange declared bankruptcy in November 2022.
  • However, discussions did not progress to an advanced stage.

On September 22, Fortune reported that Coinbase had expressed interest in acquiring the European subsidiary of FTX, which had gone bankrupt the previous November. Coinbase’s interest in FTX Europe was part of its strategy to expand its presence in the global crypto derivatives market. The company had been exploring this possibility actively, even as recently as this month.

The appeal of FTX Europe lay in its “highly profitable” derivatives business and its expanding customer base. FTX Europe had become available for sale after its parent company declared bankruptcy in the previous fall. 

A Coinbase spokesperson has verified the report, stating:

“We continually assess opportunities to strategically grow our business and engage with various teams globally.”

Other parties reportedly interested in acquiring FTX Europe included the exchange and the crypto firm Trek Labs.

Fortune also noted that the deadline for the sale had been extended to September 24. Notably, FTX had invested nearly $400 million in acquiring its European branch, which had been operating its derivatives business under a regulatory license in Cyprus. At the time of FTX’s collapse, it was the sole provider of certain popular derivatives products, including perpetual futures.

According to reports, Coinbase considered the possibility of acquiring FTX Europe as part of its exploration into expanding its crypto derivatives offerings. However, these discussions never progressed to an advanced stage.

 Although Coinbase has decided not to actively pursue the potential deal any further, the U.S.-based exchange has maintained an ongoing interest in the acquisition, as recently as this month, as reported by Fortune.

This development follows closely on the heels of regulatory scrutiny faced by prominent players in the industry, such as Gemini and Coinbase, for their involvement in derivative exchanges. Coinbase Derivatives Exchange launched futures contracts for Bitcoin (BTC) and Ethereum (ETH) back in June,  specifically designed for institutional investors amid regulatory scrutiny.

Meanwhile, the Gemini Foundation has been cautioned by the Securities and Exchange Commission (SEC) of the Philippines for its alleged unauthorized operation within the country.

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Aadrika Sharma
Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

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