Coinbase, the well-known cryptocurrency exchange, expressed its interest in acquiring FTX Europe as early as September 2023, according to documents reviewed by Fortune. This move was part of Coinbase’s strategy to expand its presence in the derivatives market, following the bankruptcy of FTX’s parent company in November 2022.
Persistent Interest Amid Bankruptcy
Despite the bankruptcy of its parent company, FTX Europe continued to onboard tens of thousands of users, demonstrating the enduring value of its license in the derivatives market.
Coinbase Engagement in Talks
Messages reviewed by Fortune indicated that Coinbase had shown interest in acquiring FTX Europe shortly after FTX’s bankruptcy in November 2022. This interest persisted as recently as early September 2023 when a European executive from Coinbase inquired about the feasibility of such an acquisition.
However, it’s important to note that Coinbase has since abandoned its pursuit of this potential deal, as confirmed by an individual familiar with the discussions.
Regulatory Challenges in the US
Coinbase’s interest in expanding the derivatives market can be seen as a response to regulatory limitations in the United States, which have created uncertainty in the crypto derivatives trading market.
To address this, the company has been working on launching an offshore derivatives exchange with a focus on the Asian market. Additionally, Coinbase is actively advocating for regulatory clarity in the U.S. crypto market.
Coinbase Holds a Strategic Approach
Coinbase has a history of strategic acquisitions in the derivatives space, such as its acquisition of the futures exchange FairX. A Coinbase spokesperson stated,
We’re always evaluating opportunities to strategically expand our business and meet with many teams around the world.
Complex Situation Surrounding FTX Europe
FTX Europe has attracted interest from major cryptocurrency companies in recent months, including Crypto.com and FTX FDM, the Bahamian entity of FTX. However, the bankruptcy estate of FTX’s parent company has argued that an acquisition is not currently feasible.
Despite this, the recent expressions of interest by Coinbase and Trek Labs have added complexity to the bankruptcy estate’s position.
In a statement, a spokesperson for the FTX Debtors expressed their commitment to maximizing the value of FTX’s assets to benefit customer recoveries.