Ali Raza
Sam Bankman Fried’s FTX exchange has proven quite resilient during the ongoing bear market. The company has been offering bailouts to troubled crypto companies and expanding its operations through acquisitions.
Recent reports have now revealed that FTX is close to acquiring Bithumb, one of the largest cryptocurrency exchanges in South Korea. A report by Bloomberg said that the discussions on this acquisition are in the final stages.
FTX plans to acquire the Bithumb exchange
Bithumb has more than 8 million registered users on the platform, and the discussions of the planned FTX acquisition have been ongoing for several months. The exchange has seen more than $1 trillion in crypto asset volumes traded on the platform.
Despite these numbers, Bithumb has been struggling over the years. In 2020, it faced several lawsuits that almost crippled its operations. At the time, the Huobi exchange was planning an acquisition of Bithumb, but this never materialized.
On the other hand, FTX has been on an acquisition and expansion spree. In June, the exchange announced the acquisition of Bitvo, a cryptocurrency exchange based in Canada. The CEO of FTX, Sam Bankman Fried, noted that the Bitvo acquisition would allow FTX to achieve global expansion.
FTX is also planning the acquisition of BlockFi, a cryptocurrency lender facing liquidity issues during the ongoing bear market. FTX reportedly plans to close the acquisition with a $680 million deal.
In June, it was also reported that FTX was also planning to acquire Robinhood, a leading social trading platform that is popular with retail traders. Robinhood laid off 9% of its staff in April this year as its growth slowed down as crypto prices dropped. However, FTX has denied any plans to acquire Robinhood.
Recently, FTX also proposed an offer to Voyager to purchase its digital assets and digital asset loans with the exclusion of Three Arrows Capital. FTX plan also involves onboarding Voyager customers and setting them up with an FTX with capital equivalent to their bankruptcy claims. Voyager has denied this offer.
FTX proves it is still liquid despite market conditions
At the onset of the crypto winter, when firms such as Celsius and 3AC started collapsing, the FTX CEO said that the exchange was committed to bailing out some of these companies to prevent investor losses.
The recent bear market has presented an opportunity for FTX to acquire these companies at a discount. Earlier this month, Bankman-Fried said that the company had “a few billion” that could be used to provide stability to other crypto companies. However, FTX is now going ahead and buying these companies. The FTX exchange believes such action shows “responsibility” during a time of need.
Related
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This article was written for Business 2 Community by Ali Raza.
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