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Crypto Exchange FTX Acquires Japanese Rival Liquid

Sam Bankman-Fried, chief executive of FTX Cryptocurrency Derivatives Exchange, speaks during a House Financial Services Committee hearing in Washington, DC, U.S., Wednesday, Dec. 8, 2021.

Stefani Reynolds | Bloomberg | Getty Images

FTX, the cryptocurrency exchange owned by billionaire Sam Bankman-Fried, is buying Japanese rival Liquid for an undisclosed sum.

The company announced Wednesday that it has reached an agreement to acquire Liquid and all of its operating subsidiaries, including Quoine Corporation and its Singapore-based unit. Quoine was one of the first crypto exchanges to gain registration with the Financial Services Agency of Japan in 2017.

FTX said it expects the acquisition of Liquid to close by March 2022. The deal is subject to regulatory and shareholder approvals.

“Following Liquid’s acquisition by FTX, Quoine will gradually integrate FTX’s products and services into its own offering, and existing Japanese FTX customers will be migrated to Quoine’s platform,” Liquid said in a statement Wednesday. .

“As part of this acquisition, FTX has also entered into an agreement with Liquid to provide its existing Japanese users with services that comply with Japanese laws, and will transfer its existing Japanese users to Quoine.”

FTX, which earlier this week announced it has raised $400 million at a valuation of $32 billion, is aggressively expanding into the Asian crypto market at a time of heightened competition in the space.

Bankman-Fried told CNBC that the company is primarily focused on acquiring licenses in multiple countries.

Traditional lenders like Japan’s SBI and Singapore’s DBS have taken steps in the space to capitalize on the wild growth in crypto. SBI is a minority shareholder in a number of crypto start-ups, including $15 billion firm Ripple, while DBS has set up its own digital asset exchange.

Founded in 2014, Liquid is one of the world’s largest crypto exchanges by volume, with nearly $72 million in daily trading volumes, according to data from CoinMarketCap. It offers both spot trading in digital currencies such as bitcoin, ether, and XRP, and financial derivatives that allow investors to speculate on price movements.

The company suffered a major hack last year that saw cybercriminals get away with more than $90 million in funds. Shortly after the attack, FTX loaned Liquid $120 million in debt financing. Liquid said at the time that the funds would be used to “strengthen its capital position” and that the two companies would pursue “further collaborative opportunities.”

Bahamas-based FTX offers crypto derivatives and spot trading in a number of jurisdictions around the world, with the exception of the United States, where its services are provided by a subsidiary called FTX US.

FTX US announced last week that it had raised $400 million in its first external round, in a deal valuing the company at $8 billion.

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