Crypto Exchange FTX Raises $900M At An $18B Valuation, Breaks From Binance
Exciting beginning of the week for one of the crypto industry’s richest, CEO Sam Bankman-Fried. His derivatives exchange FTX announced $900 million in a Series B fundraising effort. That raises its profile even more. And its value, which is now a whopping $18B, and was $1.2B a year ago. And what a year it’s been. Forbes gives us the digits:
FTX averages over $10 billion in daily trading volume; it increased revenues tenfold this year and 75 times since its Series A funding round closed in mid-2020, according to a company statement.
Among the over 60 investors that participated this time around, we find:
Paradigm, Sequoia Capital, Ribbit Capital, Third Point, Lightspeed Venture Partners, Coinbase Ventures, Softbank, Sino Global Capital, Multicoin, the Paul Tudor Jones family, VanEck, Circle and hedge funders Izzy Englander and Alan Howard.
Not among the investors: Binance.
Why Is Binance Not Involved With FTX Anymore?
The Chinese juggernauth was an early investor in FTX. Even more, Binance CEO Changpeng Zhao revealed in the “Up Only” podcast that he and Sam Bankman-Fried were in talks about opening an exchange together before any of the two made it big. So, what happened? Why did Binance give up its equity stake in FTX? Did they fall out? Or are Binance’s recent troubles with every country under the sun to blame? Changpeng Zhao answers Forbes:
“We’ve seen tremendous growth from them, we’re very happy with that but we’ve exited completely.” He explains the withdrawal as a part of “a normal investment cycle” and says it was completed on good terms: “We’re still friends but we no longer have any equity relationship.”
What Does The Future Hold For FTX? And What About The Past?
Our sister site NewsBTC informs us about Bankman-Fried’s original business, Alameda Research:
Alameda Research made more money than god in an arbitrage trade. They figured out there was a premium hidden in Bitcoin’s prices in Japan. They bought in the U.S., sold in Japan, and made history. And a fortune. After that, “The FTX derivatives exchange is Sam’s second endevour, and it’s become one of the most popular crypto exchanges since it was founded in 2019.”
For the future, we have to consult The Block, who recently spoke to Bankman-Fried:
With the fresh capital in hand, FTX is looking to break into a business line that is common on Wall Street: white-labeling software. Bankman-Fried, a former Jane Street trader, said that the firm has already been introduced to potential clients. “Whether it is a neo-bank looking to offer crypto trading or a payment portal, everything we have is available via API,” he told The Block.
What Does All Of This Have To Do With Tom Brady And Gisele Bündchen
A lot, considering they both have equity in the company. The celebrity couple recently signed a deal to be brand ambassadors for FTX. Their timing was perfect, as their stock definitely raised with this $900M fundraising effort. As for the deal itself, Bitcoinist timely reported:
Brady and Bündchen will become FTX brand ambassadors in the new deal, in return for an undisclosed amount of cryptocurrency and for an equity stake in FTX. Additionally, Bündchen will serve as the firm’s environmental and social initiatives advisor. The move comes after the exchange committed to being carbon neutral through carbon offsets.
Their deals with the sports world are one of the strategies that raised FTX’s profile over the last year. 1.- They recently aquired naming rights to the Miami Heat’s arena. 2.- FTX is the cryptocurrency exchange partner of the Major Leagues Baseball league. 3.- They paid $210M to change the name of e-sports team TSM to TSM FTX. So, they were making huge moves before they got all this new money.Source