Two-years-old Hong Kong crypto exchange FTX Trading hits $18bn valuation

21 Jul, 2021 23:53
source: Singularity Financial

Singularity Financial Hong Kong July 21, 2021 – FTX, a Hong Kong-based cryptocurrency exchange that launched in 2019, raised $900 million in Series B funding, the largest-ever VC round for a crypto company, let alone for an exchange that prohibits Americans from trading on its primary marketplace.

FTX Trading Ltd said on Tuesday its valuation had risen to $18 billion after this funding round that included SoftBank Group Corp and was one of the biggest fundraises for a crypto company.

Founded and led by Sam Bankman-Fried, a 29-year-old California native who worked for quantitative-trading giant Jane Street Capital LLC before getting into bitcoin, FTX is the owner and operator of the FTX.COM cryptocurrency exchange. FTX’s main office is in Hong Kong and its parent company, FTX Trading Ltd., is domiciled in Antigua and Barbuda.

FTX’s main business is running a market for crypto derivatives—risky instruments that allow traders to place leveraged bets on whether digital currencies will rise or fall. The two-year-old company said it has more than 1 million users and averages about $10 billion in trading volume per day, with revenue surging more than tenfold this year.

Lately, FTX has sought to raise its profile through sports sponsorships. Earlier this year, the company notched a $135 million, 19-year deal to buy the naming rights to the home of the Miami Heat. The stadium is now called FTX Arena. In June, National Football League star Tom Brady became an “ambassador” for FTX. As part of that deal, Mr. Brady and his wife, supermodel Gisele Bündchen, both took equity stakes in FTX.

The round saw participation from more than 60 investors, including Paradigm, Sequoia Capital, Thoma Bravo, SoftBank, Ribbit Capital, Insight Partners, Third Point, Lightspeed Venture Partners, Altimeter, BOND, NEA, Coinbase Ventures, Willoughby Capital, 40North, Senator Investment Group, Sino Global Capital, Multicoin, the Paul Tudor Jones family, Izzy Englander, Alan Howard, VanEck, Hudson River Trading and Circle.

Other prominent investors in the funding round included hedge-fund billionaires Israel Englander and Alan Howard ; the family of another hedge-fund billionaire, Paul Tudor Jones; and tech-oriented private-equity firm Thoma Bravo.

Binance, another major cryptocurrency exchange, has faced scrutiny from regulators in Britain, Germany, Japan, and Hong Kong. The United States is also investigating the exchange, according to a media report.

The tightening scrutiny has weighed on bitcoin’s price, with the most popular cryptocurrency on Tuesday falling below $30,000 for the first time in a month.