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FTX acquires Liquid and expands operations in Japan

FTX crypto exchange announced its acquisition of Liquid, its East Asian competitor based in Japan. According to a statement released on Liquid’s website, the transaction is expected to close around March 2022. 

Quoine Corporation which is a subsidiary of the exchange will also be acquired by FTX per the press release: 

‘Liquid Group and all of its operating subsidiaries including Quoine Corporation (Cryptocurrency Exchange Business Kanto Finance Bureau Director No. 00002) and Quoine Pte. in Singapore are being acquired by FTX Trading Ltd.’

Despite the deal’s expected closing in a month, the decision will still be subjected to regulatory and shareholder approval of Liquid Group. 

As part of the acquisition deal, FTX is expected to continue serving Japanese users in compliance with Japanese laws and crypto regulations. This is because Quione, one of Liquid’s subsidiaries, is a licensed Japanese crypto exchange with a Type I Financial instruments Business license. 

Current users of the platform are said to receive email notifications for further details of the transition and transfer, according to the press release. 

The deal was brought about by the aggressive expansion of FTX amidst its rise to a US$32 billion valuation according to market capitalisation despite the bear of the crypto industry in the last week of January 2022. 

FTX was able to raise a combined US$2 billion funding for its venture capital. This built up the company’s war chest despite other digital currencies sinking in terms of asset value. 

According to a statement made by Sam Bankman-Fried, chief executive officer of FTX to CNBC, the crypto firm is focused on acquiring licenses in several countries including Japan.

Moreover, the CEO said in previous statements that the US arm of FTX is now authorised to sell derivatives products including futures and options that allow investors to speculate on market movements and trends. 

The US-based crypto company is among the most valuable private crypto startups globally with Bankman-Fried as one of the richest people with crypto assets. His net worth is over US$22 billion, according to a report posted by Forbes. 

Liquid and its 2021 major hack

In August 2021, Liquid Group experienced a major hack that stole US$97 million of its assets. Many online wallets in the custody of the crypto firm were compromised because of this. 

FTX provided financial help to Liquid after the cyberattack, lending US$120 million to the compromised crypto platform as part of its debt financing program. 

According to Liquid,  the funds were utilised as a means to strengthen its capital position in the Asian crypto market. Moreover, the Japanese crypto platform also said that the two firms will pursue further collaboration in the future, as reported by CNBC. 

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