Coinbase Considers Acquisition Of FTX Europe To Expand Market

Coinbase plans to acquire a European branch FTX crypto company. (Photo; Doc. Tronweekly)

JAKARTA - After FTX went bankrupt in November 2022, FTX Europe became the only actor in the European market offering crypto trading services in the form of a virtual futures contract.

For information only, the perpetual futures contract is a financial instrument that allows traders to trade cryptocurrencies with leverage without having physical assets. Perpetual futures contracts do not have expiration dates and allow long (buy) positions or short (sales) positions with high flexibility.

The latest news reveals that crypto exchange giant Coinbase is considering the possibility of acquiring FTX Europe after the fall of the exchange last year. While talks about the acquisition have yet to reach an agreement, Coinbase's interest in FTX Europe highlights how important derivatives are in the company's global strategy.

While the volume of spot trading in the crypto market has decreased significantly, demand for derivatives continues to increase. Data from crypto analytics firm Kaiko Research shows that the volume of derivatives in the second quarter of 2023 has reached six times the volume of spot trading. This shows an increasing trend of derivative popularity among crypto investors.

Prior to bankruptcy in November, FTX Europe was the only entity offering special crypto derivatives, such as perpetual futures, in the European market. The company has met the necessary requirements to operate in Europe after acquiring $376 million worth of Digital Assets AG (IDR 5.7 trillion) by the end of 2021.

Although FTX Europe owned thousands of users before its parent company bankruptcy, FTX, many consider derivative licenses as one of the potential reasons to acquire part of FTX's assets.

Not only FTX Europe, Coinbase previously also managed to acquire the FairX exchange in January 2022. A spokesman from Coinbase said, "We've always evaluated opportunities to develop our business strategically and have been in contact with many teams around the world."

Coinbase Opportunities Acquire FTX Europe

Although previous talks about the acquisition did not manage to reach an agreement, Coinbase is still active in seeing acquisition opportunities in September. This means that Coinbase's possibility of acquiring the currently inactive FTX Europe is still open.

According to a Fortune report, FTX debtors, led by former Enron official John Ray III, hope to get maximum profit from selling FTX assets to ensure their user refunds. Therefore, the team plans to delay sales as long as possible. As a result, the deadline for completing sales has been extended until September 24.

Apart from Coinbase, several other crypto companies have also evaluated the possibility of acquiring FTX, including well-known names such as Crypto.com, FTX FDM, and Trek Labs. FTX debtors continue to consider whether there is a viable option to sell some or all FTX European business assets.