It has been revealed that Coinbase considered acquiring FTX Europe, which filed for bankruptcy in November 2022, on two separate occasions. However, according to recent developments, this acquisition process has not reached a definitive conclusion yet.
Coinbase’s Move for FTX Europe
According to sources from Fortune, Coinbase aimed to purchase FTX Europe due to its highly profitable derivatives business and its growing customer base. This move was a part of Coinbase’s plans to expand its overseas derivatives operations. It’s well-known that Coinbase has been aiming for global expansion recently due to regulatory pressures in the U.S., but it was noted that these acquisition discussions didn’t progress to the final stages.
This step by Coinbase indicates that they evaluated FTX’s European branch twice: first in November 2022 and most recently in September 2023. Confirming these claims, a company spokesperson commented, “We always evaluate opportunities to strategically expand our business and collaborate with teams worldwide.”
Coinbase’s Revenue Situation Also Reported
FTX Europe conducted its derivatives transactions under a regulatory license in Cyprus. They were known as the sole company offering certain popular derivative products in this space. (Derivatives are financial instruments whose value is derived from underlying assets like Bitcoin and are used by investors for hedging, leverage, and market speculation.)
According to the latest quarterly earnings report, Coinbase recorded a revenue of $707 million in the second quarter of 2023. However, $327 million of this figure came from spot trading, marking a 13% decrease from the previous quarter.
As per the reports, Coinbase’s process of acquiring FTX Europe is seen as a reflection of the crypto exchange’s global expansion strategy and interest in the derivatives market. However, several variables will determine the outcome of this process.