FTX Acquires Liquid Group, Expanding Presence in Japan

The latest acquisition follows FTX’s $400 million Series C funding round last month, aimed at picking up licenses in major markets

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Sam Bankman-Fried; Blockworks Exclusive Art by Axel Rangel

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key takeaways

  • FTX has acquired fintech firm Liquid for an undisclosed sum and will work with it to provide crypto products to Japanese customers
  • CEO Sam Bankman-Fried said his company has reached out to regulators to initiate a dialogue

Sam Bankman-Fried’s FTX has acquired fintech firm Liquid Group and its subsidiaries for an undisclosed sum in a bid to navigate Japan’s rigorous crypto exchange laws.

The acquisition is expected to close in March 2022 following satisfactory and customary closing conditions, according to a statement on Wednesday. Liquid and FTX are expected to work together to provide products and liquidity to both retail and institutional investors within the Japanese and global markets.

As part of the deal, FTX said it absorbed Liquid Group subsidiary Quoine, a fintech company headquartered in Japan with offices in Singapore and Vietnam. Quoine operates the Liquid exchange — not to be confused with the parent company — one of Asia’s largest crypto platforms by trade volume.

Quoine is among 29 other regulated exchange service providers operating under the country’s Payment Services Act. As part of Japan’s regulations, crypto exchange service providers need to be registered with the Financial Services Agency (FSA) and a corresponding local financial bureau.

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Last year, Quoine was granted a Type 1 Financial Instruments Business registration by the FSA. A Type 1 gives intermediaries, including brokerages and exchanges, the legal runway to offer securities and derivatives.

“In connection with this acquisition, FTX has also entered into an agreement with Liquid to provide its existing Japanese users with services in compliance with Japanese laws and will transfer its existing Japanese users to Quoine, with effect from 30 March 2022,” the statement reads.

The move follows FTX’s $400 million Series C raise in January that will fuel its plans to broaden its services and acquisitions into international markets by gaining additional licenses. Details on specific regions under consideration were scant.

FTX’s funding round was the exchange business’ third raise in six months.

Bloomberg reported Tuesday that Japan’s Virtual and Crypto Exchange Association, a self-regulatory body sanctioned by the FSA, is considering making it easier to list more than a dozen cryptos at a time without a lengthy review process.

While a final decision on the change in listing rules in Japan is yet to be made, members from the self-regulatory body said current restrictions were stymieing industry growth, paving the way to a possible overhaul of the way crypto is screened in the island nation.

Blockworks attempted to contact FTX and Liquid but did not receive a reply by press time.


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