Coinbase, a major U.S. cryptocurrency exchange, had considered acquiring the European subsidiary of the now-defunct trading platform FTX, as reported by Fortune. The potential acquisition underscores the growing significance of derivatives in Coinbase’s strategy for global expansion.
Documents obtained by Fortune show that Coinbase expressed interest in FTX Europe, which is licensed in Cyprus. This interest was apparent shortly after FTX sought bankruptcy protection in the U.S. in November and was rekindled as recently as early September. Despite the initial exploration, the acquisition discussions didn’t progress to advanced stages, and sources indicate that Coinbase has since moved on from this particular deal.
Crypto derivatives have surged in prominence, even surpassing spot trading volumes in some instances. Data from Kaiko Research suggests that in Q2 2023, the trading volume for crypto financial instruments based on popular cryptocurrencies like Bitcoin and Ethereum was six times the volume of spot trades.
The regulatory landscape for crypto derivatives remains murky, especially in the U.S. Europe, on the other hand, is yet to fully outline its stance under the new Markets in Crypto Assets (MiCA) regulation. FTX Europe, acquired in 2021 for $376 million, held the unique position of offering specific crypto derivatives known as perpetual futures in Europe before the parent company’s downfall.
Coinbase, through a recent blog post, highlighted its intentions to grow in regions with clear crypto regulations, spotlighting Europe in particular. In contrast, the U.S. has been leaning towards interpreting and applying existing rules.
FTX Europe’s financial reports reveal that despite the parent company’s troubles, the platform was still registering significant user growth. As the assets of FTX are currently on sale, other entities, including a crypto company named Trek Labs, have shown interest in acquiring FTX Europe. Bidders have until September 24 to make their offers, as per sources in the report.