Biggest Private Crypto Deal Ever Is Closed

It has come to light that Antigua-based crypto derivatives exchange FTX has closed a record $900 million fundraise in what is claimed to be the biggest private crypto deal ever. This will bring the company valuation to €18 billion, making Sam Bankman-Fried the wealthiest crypto billionaire.

The company told Forbes the fundraise was led by Goldman Sachs and John Burbank’s Passport Capital. Other investors include Pantera Capital, Huiyin Blockchain Venture, and DHVC.

The company claims to be on pace to process nearly $1 trillion in notional value of derivatives products this year alone, with over 15 million contracts traded so far by retail and institutional investors.

Huge Hedge Fund Demands
“We’ve seen huge demand from hedge funds, family offices, and other sophisticated investors looking for a regulated and reliable place to trade digital currency derivatives,” said Sam Bankman-Fried, CEO of FTX, in a press release. “Our platform is the only one that addresses all the issues around liquidity, compliance, and the ability to transact in both crypto and fiat currencies. All at a truly institutional-grade level.”

The company operates its copy trading platform, which is cleared through National Financial Services LLC (NFS). It currently only lists a few coins but will soon expand to ERC20 tokens in addition to launching new markets in the coming months.

The company has been on a month-long hiring spree for customer support, compliance, human resources, and engineering roles to anticipate its explosive growth. It recently has five highly talented people working in it: the brain behind the success of FTX.

The total fundraise is noteworthy for its sheer size and the fact that it comes only a few months after its last one. It also draws attention to what seems to be the industry’s most productive hunting ground: Antigua.

Silicon Valley Links
Mr. Bankman-Fried(Co-Founder & CE0 ExecutiveOperations) is no stranger to raising large sums of money in the crypto space. Arguably the most successful Bitcoin mining firm ever, his previous company raised over $50 million from Silicon Valley venture capital firms, including A16Z and Lightspeed Ventures, back at a $700 million valuation.

FTX, which launched Antigua’s first-ever licensed crypto exchange in March, still has a long way before it catches up with its big competitors like Coinbase and Binance. But its fundraising prowess will likely help it get there sooner than most of the emerging exchanges.

FTX differentiates from other major exchanges because it can offer even inexperienced traders advanced functionality and sophisticated investment products. The company has been able to parlay its early mover advantage and reputation as a transparent and reliable crypto exchange to lure top-tier investors interested in trading derivatives products.

“The primary goal of the raise was to find strategic allies who can help FTX grow its brand,” but the capital itself will be primarily used for acquisitions, says Sam Bankman-Fried, CEO of the FTX.

Today, FTX has more than one million registered users, and its flagship platform Finex generates more than one billion dollars in annual transactions.

The company will use the funds to support an aggressive international expansion into new markets such as Japan and Korea, building local customer bases and equipping itself with a team of local employees and partners. The company said it was also considering opening exchanges in Dubai, Thailand, China, and Indonesia.

Long Term Plans For FTX Fundraising
In the longer term, FTX plans to leverage this fundraising round to build out a suite of products for both retail and institutional clients that will include wallets, margin trading, Stablecoins, and lending products such as contracts for difference (CFDs).

The company is also planning to launch its token, but FTX Team wouldn’t go into details and only said that the FTX token would be used in “a variety of ways” on the platform to advance crypto liquidity.

As a result of the investment, Bankman-Fried, whose fortune Forbes estimated to be worth $8.3 billion as of last month, stands to grow his riches by at least $7.9 billion to $16.2 billion, thus cementing his title of the wealthiest known crypto billionaire. He owns 58% of the company’s shares.

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