There are reports today that Coinbase has considered acquiring FTX Europe to expand its global crypto derivatives business.
NY-based Fortune business magazine state that: “The platform continued to add tens of thousands of users until its parent company’s bankruptcy. The enduring value of its license — which could only be transferred as part of an acquisition — drew interest from various buyers, with the FTX debtors’ estate auctioning off different parts of Sam Bankman-Fried’s once-mighty empire.”
Documents viewed by Fortune express: “Coinbase has also expressed interest, both immediately after FTX’s bankruptcy in November 2022 and as recently as early September 2023, with a European executive for the exchange inquiring about the possibility of an acquisition. Coinbase is no longer pursuing the potential deal, according to a person familiar with the talks.”
Derivatives – or complex financial instruments that derive value from an underlying asset such as BTC or ETH – make up a large amount of crypto-trading volumes. Compared with spot trading, which is based on the current price of an asset, derivatives have proven to be increasingly popular.
Crypto analytics firm Kaiko Research say that derivatives volume was six times larger than spot volume in the second quarter of this year.
Coinbase has previously made derivatives acquisitions, including the futures exchange FairX in January of last year.
Other entities reported as interested in FTX Europe include Crypto.com.
FTX Europe beginnings
The legally embroiled FTX exchange spent nearly $400million acquiring Swiss company Digital Assets AG (DAAG), which then became FTX Europe.
According to a 12 July avoidance and recovery of transfers filing to the United States Bankruptcy Court for the District of Delaware, Sam Bankman-Fried acquired DAAG through Alameda Research for $376m, even though the Swiss company recorded little activity and no intellectual property other than a business plan. The FTX masterplan was to get access to European regulators by owning a local company, according to plaintiffs.
