FTX.US President: Crypto Derivatives are 2022 Priority

key takeaways

FTX.US’s first external funding round — including participation from Paradigm, Temasek, NEA and Multicoin Capital— values the company at $8 billion
Company could look to acquire companies as a way to access their users, gain licenses, president says

Fresh off a hefty funding round, the US affiliate of crypto exchange FTX is looking to build its derivatives business as the company eyes acquisitions to bolster its user base.

FTX.US closed a $400 million Series A funding round Wednesday, valuing the company at about $8 billion.

Participants in the round include Paradigm, Temasek, NEA, Multicoin Capital, Tribe Capital, Ontario Teachers’ Pension Plan Board, SoftBank Vision Fund 2, Greenoaks Capital, Steadview Capital and Lightspeed Venture Partners.

“There was such interest that we felt it was a good time to fully capitalize the entity and establish ourselves with the public-facing raise and valuation — and be able to acquire funds to take our business to the next level,” FTX.US President Brett Harrison told Blockworks.

FTX.US’s users increased from less than 10,000 at the beginning of 2021 to roughly 1.2 million at the end of the year, Harrison said.

Spot crypto traded on the exchange last year totaled $67 billion. Its total average daily volume grew 608% over the last 12 months as peak daily volume hit $812 million in November.

Making derivatives a priority

Crypto derivatives are essential to the exchange’s growth plans this year, Harrison said. The company in August acquired digital currency futures and options exchange LedgerX, now known as FTX US Derivatives.

FTX.US has applied to the Commodity Futures Trading Commission (CFTC) to offer bitcoin and ether futures to retail and institutional customers.

Former CFTC commissioner Mark Wetjen joined the company last year as head of policy and regulatory strategy. FTX.US also recently added a board of directors — a prerequisite of the CFTC permitting the exchange to offer leveraged trading.

The business is also trying to increase the reach of the NFT marketplace it launched in October.

“There’s a lot of potential to be able to integrate with various blockchain gaming and other metaverse companies that are looking to use exchange technology as the backend of their platforms,” the FTX.US president said.

FTX.US could look to acquire companies to tap into their users, according to Harrison, who highlighted FTX’s buy of portfolio tracker Blockfolio. The business may also look to acquisitions to gain certain licenses.

“With FTX US Derivatives, it was a faster process to acquire a company with existing licenses then to be able to obtain them de novo,” he said. “There might be opportunities for acquiring companies with licenses that give us regulatory approval to offer different kinds of business lines.”

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