Crypto Exchange FTX Valued at $18 Billion in Funding Round
Investors include SoftBank, Sequoia Capital and Daniel Loeb’s Third Point hedge fund
FTX founder Sam Bankman-Fried said the company plans to use its new funding to push further into regulated markets.
PHOTO: ANTHONY KWAN FOR THE WALL STREET JOURNAL
By
Alexander Osipovich
July 20, 2021 1:00 pm ET
Cryptocurrency exchange FTX has raised money at an $18 billion valuation, a deal that shows investors’ enthusiasm for digital currencies even after a crash that erased half of bitcoin’s value over the past three months.
FTX raised $900 million in a new funding round that closed Tuesday. Participants in the round included Japanese technology investor SoftBank Group Corp. , Silicon Valley venture-capital firm Sequoia Capital and Third Point, the hedge fund led by billionaire Daniel Loeb, FTX said.
The transaction vaulted FTX into the ranks of the world’s highest-valued crypto companies. It also provided a measure of mainstream acceptance for FTX, which bars Americans from trading on its main marketplace to avoid running afoul of U.S. regulators. FTX’s main office is in Hong Kong and its parent company, FTX Trading Ltd., is domiciled in Antigua and Barbuda.
Other prominent investors in the funding round included hedge-fund billionaires Israel Englander and Alan Howard ; the family of another hedge-fund billionaire, Paul Tudor Jones ; and tech-oriented private-equity firm Thoma Bravo.
The founder and chief executive of FTX is Sam Bankman-Fried, a California native who worked for quantitative-trading giant Jane Street Capital LLC before getting into bitcoin. FTX has grown rapidly since starting operations in 2019, making the 29-year-old Mr. Bankman-Fried a billionaire.
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FTX’s main business is running a market for crypto derivatives—risky instruments that allow traders to place leveraged bets on whether digital currencies will rise or fall. FTX handles more than $10 billion worth of trades on an average day, according to data provider CryptoCompare.
Lately, FTX has sought to raise its profile through sports sponsorships. Earlier this year, the company notched a $135 million, 19-year deal to buy the naming rights to the home of the Miami Heat. The stadium is now called FTX Arena. In June, National Football League star Tom Brady became an “ambassador” for FTX. As part of that deal, Mr. Brady and his wife, supermodel Gisele Bündchen, both took equity stakes in FTX.
FTX says the sports sponsorships are aimed at promoting FTX.US, a crypto exchange catering to American customers that was designed to be compliant with U.S. rules. FTX.US offers traders a less exotic selection of markets than FTX’s main overseas exchange.
The listing of Coinbase, the largest bitcoin exchange in the U.S., introduces a new way to invest in cryptocurrencies. WSJ explains how Coinbase is trying to distance itself from the risks of bitcoin to succeed on Wall Street. Photo illustration: George DownsTHE WALL STREET JOURNAL INTERACTIVE EDITION
In an interview, Mr. Bankman-Fried said FTX plans to use its new funding to push further into regulated markets. Potentially, that could include acquisitions of companies licensed to do financial activities in various countries, he said.
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Investors include SoftBank, Sequoia Capital and Daniel Loeb’s Third Point hedge fund
FTX founder Sam Bankman-Fried said the company plans to use its new funding to push further into regulated markets.
PHOTO: ANTHONY KWAN FOR THE WALL STREET JOURNAL
By
Alexander Osipovich
July 20, 2021 1:00 pm ET
Cryptocurrency exchange FTX has raised money at an $18 billion valuation, a deal that shows investors’ enthusiasm for digital currencies even after a crash that erased half of bitcoin’s value over the past three months.
FTX raised $900 million in a new funding round that closed Tuesday. Participants in the round included Japanese technology investor SoftBank Group Corp. , Silicon Valley venture-capital firm Sequoia Capital and Third Point, the hedge fund led by billionaire Daniel Loeb, FTX said.
The transaction vaulted FTX into the ranks of the world’s highest-valued crypto companies. It also provided a measure of mainstream acceptance for FTX, which bars Americans from trading on its main marketplace to avoid running afoul of U.S. regulators. FTX’s main office is in Hong Kong and its parent company, FTX Trading Ltd., is domiciled in Antigua and Barbuda.
Other prominent investors in the funding round included hedge-fund billionaires Israel Englander and Alan Howard ; the family of another hedge-fund billionaire, Paul Tudor Jones ; and tech-oriented private-equity firm Thoma Bravo.
The founder and chief executive of FTX is Sam Bankman-Fried, a California native who worked for quantitative-trading giant Jane Street Capital LLC before getting into bitcoin. FTX has grown rapidly since starting operations in 2019, making the 29-year-old Mr. Bankman-Fried a billionaire.
ADVERTISEMENT - SCROLL TO CONTINUE
FTX’s main business is running a market for crypto derivatives—risky instruments that allow traders to place leveraged bets on whether digital currencies will rise or fall. FTX handles more than $10 billion worth of trades on an average day, according to data provider CryptoCompare.
Lately, FTX has sought to raise its profile through sports sponsorships. Earlier this year, the company notched a $135 million, 19-year deal to buy the naming rights to the home of the Miami Heat. The stadium is now called FTX Arena. In June, National Football League star Tom Brady became an “ambassador” for FTX. As part of that deal, Mr. Brady and his wife, supermodel Gisele Bündchen, both took equity stakes in FTX.
FTX says the sports sponsorships are aimed at promoting FTX.US, a crypto exchange catering to American customers that was designed to be compliant with U.S. rules. FTX.US offers traders a less exotic selection of markets than FTX’s main overseas exchange.
The listing of Coinbase, the largest bitcoin exchange in the U.S., introduces a new way to invest in cryptocurrencies. WSJ explains how Coinbase is trying to distance itself from the risks of bitcoin to succeed on Wall Street. Photo illustration: George DownsTHE WALL STREET JOURNAL INTERACTIVE EDITION
In an interview, Mr. Bankman-Fried said FTX plans to use its new funding to push further into regulated markets. Potentially, that could include acquisitions of companies licensed to do financial activities in various countries, he said.
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