FTX hits $32 billion valuation in new funding round

Published On: February 1, 2022Categories: Alternative Investments2 min read

The cryptocurrency exchange said Monday that it raised $400 million in a Series C financing round — its third fundraise in the last nine months

Cryptocurrency exchange FTX saw its valuation swell to $32 billion in a new funding round announced Monday, highlighting continued appetite for the sector even as investors grow wary about a sharp pullback in crypto prices.

The Bahamas-based company said Monday that it raised $400 million in a Series C financing round — its third fundraise in the last nine months.

FTX, which offers derivatives products as well as spot trading, is one of the world’s largest digital currency exchanges. Once an obscure name, the firm has become a key player in the nascent market, rivalling the likes of Coinbase and Binance.

The company doesn’t offer trading in the United States. That function is provided by FTX U.S., its sister exchange. Last week, FTX U.S. announced a $400 million investment valuing the firm at $8 billion.

FTX said all investors in the U.S. affiliate, which included Singaporean state investor Temasek, SoftBank’s Vision Fund 2 and Tiger Global, jumped aboard for its own fundraise.

Having now raised a combined $2 billion in venture funding to date, FTX has built up a war chest at a time when digital currency prices have sunk considerably. Bitcoin is down 46% from its November record of almost $69,000, while other cryptocurrencies have slumped even further.

That’s led to fears the market may be on the cusp of a more severe downturn known as ‘crypto winter.’ The last such occurrence happened in late 2017 and early 2018, when bitcoin tanked as much as 80% from its then-record high. Bear markets are typically bad news for crypto exchanges as it means volumes tend to dry up.

I think we’re not entering a long term crypto winter, Sam Bankman-Fried, FTX’s CEO and co-founder, told CNBC.

There have been changes in expectations of interest rates, and that’s been moving crypto markets. But it’s been moving markets more generally as well, Bankman-Fried said.

A large focus for FTX, Bankman-Fried said, is acquiring licenses in several countries. Its U.S. arm is now authorized to sell derivatives products such as futures and options, which allow investors to speculate on movements in the price of an asset. Bankman-Fried said FTX’s international business will be licensed across ‘the bulk of the Western world’ by the end of this year.

The company plans to use the fresh funds to continue developing new products. FTX last year launched a marketplace for trading non-fungible tokens — the crypto world’s answer to collectible items — and is now starting to license its software to other businesses in the realms of fintech and gaming, Bankman-Fried said.

About the Author: Jonathan Adams

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