Coinbase’s Interest in Acquiring FTX Europe to Expand Derivatives Business
According to a recent report from Fortune Magazine, Coinbase, a prominent cryptocurrency exchange listed on NASDAQ, had expressed interest in acquiring FTX Europe, the European entity of FTX, in order to expand its presence in the derivatives market. This interest was evident as early as September 2023, following FTX’s bankruptcy in November 2022.
Despite the talks, no concrete deal materialized between Coinbase and FTX Europe. However, Coinbase’s pursuit of FTX Europe highlights its ambition to enter the derivatives market and further its global business strategy.
Financial records from FTX Europe revealed that the platform continued to onboard thousands of users even during its parent company’s bankruptcy. The enduring value of FTX Europe’s license, which could only be transferred through an acquisition, attracted attention from multiple potential buyers. As a result, the FTX debtors’ estate decided to auction various components of the once-powerful empire built by Sam Bankman-Fried.
Messages reviewed by Fortune indicated that Coinbase had shown interest in acquiring FTX Europe shortly after the bankruptcy and as recently as early September 2023. However, it has since been confirmed that Coinbase has abandoned its pursuit of the deal.
Coinbase has been exploring opportunities in the derivatives space, including the acquisition of the futures exchange FairX. The company has also been working on launching an offshore derivatives exchange focused on the Asian market, as regulatory limitations in the US have created uncertainty in the crypto derivatives trading market.
FTX Europe, which was acquired in 2020, became embroiled in the bankruptcy estate’s legal actions seeking to recover hundreds of millions of dollars. Despite recent interest from major cryptocurrency companies, the estate has claimed that a sale is currently not feasible. However, the expressions of interest from Coinbase and Trek Labs have added complexity to the situation, potentially leaving room for an acquisition as the proposed sale deadline has been extended.
The FTX debtors’ spokesperson expressed their commitment to maximizing the value of FTX’s assets for the benefit of customer recoveries.