FTX exchange acquires Liquid and absorbs its subsidiary Quoine

FTX exchange acquires Liquid and absorbs its subsidiary Quoine

By Sam Grant - min read
  • The acquisition deal is yet to receive the green light from the financial markets regulator and shareholders
  • Japan-based FTX users will be moved to Quoine after the completion of the deal

Following a successful $400 million Series C funding round at the end of last month, FTX has moved to acquire Liquid – a Japan-based crypto exchange firm. The Bahamas-based exchange, led by Sam Bankman-Fried, is looking to seal the acquisition deal for Liquid by March.

Neither party revealed the deal's specifics, including the financial sum involved. This is not the first time that Liquid and FTX have crossed paths. Last year in August, the former suffered a hack that saw it lose up to $90 million worth of funds in almost 70 various crypto assets. Following the hack, FTX financed the exchange, offering aid of 120 million.

It's a strategic play by FTX

The move by FTX represents the latest effort to expand its reach, and the Liquid acquisition strikes as particularly convenient as Japan's cryptocurrency regulators are strict. By absorbing an already licensed exchange, FTX will have an easy path extending its presence in the region.

As part of the agreement, FTX will take over operations of Liquid's subsidiary Quoine, which operates Liquid exchange in Japan.

"In connection with this acquisition, FTX has also entered into an agreement with Liquid to provide its existing Japanese users with services in compliance with Japanese laws, and will transfer its existing Japanese users to Quoine," Liquid disclosed.

Exchanges looking to operate in the East Asian country must hold a Type I Financial Instruments Business license.

Quoine, which has also set up shop in Singapore and Vietnam, was among the first exchanges to get Japan's Financial Services Agency approval to operate in Japan. The agency's stringency is further evidenced by the fact that only less than 30 exchanges have received the go-ahead to operate in the country.  

Quoine will serve existing FTX users

Quoine will add FTX's offering to its own, according to the blog post published by Liquid. Consequently, FTX's current users in Japan will be served by the new entity born that will have products and services from both parties. This migration of users to the new platform will happen at the end of March.

FTX has previously revealed intent to have traditional financial institutions under its umbrella. The Financial Times reported that exchange's chief executive Bankman-Fried has eyes on 'blue-chip acquisitions' like Goldman Sachs. Bankman-Fried believes that once his exchange surpasses its competitors (Coinbase and Binance), it will be in a position to absorb giant banking institutions.