Surpassing Coinbase and catching up with Binance, what key milestones has FTX achieved over the past year?
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Surpassing Coinbase and catching up with Binance, what key milestones has FTX achieved over the past year?
FTX is now one of the top three cryptocurrency exchanges globally. According to CNBC, FTX generated $1.02 billion in revenue in 2021, a 1,000% increase from the previous year.
Navigating Web3 tides with focused insightsIf one were to vote for the most outstanding crypto startup of 2021 or 2022, FTX would undoubtedly be many people's MVP. Since relocating its headquarters to the Bahamas, FTX has been expanding globally through a "compliant approach," acquiring other companies while partnering with brands and well-known athletes in the sports world to build brand recognition.
Recently, FTX released a three-year anniversary video, featuring numerous celebrities offering their congratulations.
Notable figures include popular entertainers such as Jye Lee, Nick Chou, Nine Chen, Yu-Hsi Li, and Sylwanin Wang, as well as political figures like city councilors Huei-Chu Chin and Ching-Ping Huang.
The video also features renowned athletes from around the world, including NFL top draft pick Trevor Lawrence, MLB Hall of Famer David Ortiz, four-time Grand Slam tennis champion Naomi Osaka, and NBA legend Shaquille O'Neal.
In just three years since its founding, FTX has become one of the top three cryptocurrency exchanges globally. According to CNBC, FTX generated $1.02 billion in revenue in 2021, a 1,000% increase compared to the previous year.
So how did FTX achieve this?
Source: Twitter @FTX_Chinese
FTX is the World’s FTX
In September 2021, FTX moved its exchange headquarters to the Bahamas. By the end of that month, FTX announced it had obtained regulatory approval from Bahamian authorities. FTX recognized early on that as cryptocurrencies entered the mainstream, regulation would become a key factor in global expansion.
Beyond its established presence in FTX US, FTX now operates compliant exchanges across regulated regions including Europe, Australia, and Japan.
Below is a timeline summarizing FTX’s global expansion:
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FTX Europe: In March 2022, FTX obtained regulatory approval from the Cyprus Securities and Exchange Commission (CySEC), establishing FTX Europe through a licensed investment firm within the Eurozone, offering European users cryptocurrency derivatives services.
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FTX Australia: At the end of March 2022, FTX secured an Australian Financial Services License, launching FTX Australia to provide residents with crypto derivative products including futures contracts, options contracts, leveraged tokens, and Contracts for Difference (CFDs) on digital assets.
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FTX Japan: In June 2022, FTX registered in Japan under the Financial Instruments and Exchange Act as a Type 1 Financial Instruments Business, launching FTX Japan to offer spot trading and perpetual contracts, along with fiat support enabling fast deposits and withdrawals in Japanese yen.
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Acquisition of Canadian platform Bitvo: In June 2022, FTX acquired Bitvo, Inc., a Canadian digital asset exchange regulated under securities law and registered with FINTRAC as a money services business. This acquisition enables FTX to offer compliant products to Canadian users.
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FTX Exchange FZE: FZE is actually a subsidiary of FTX Europe. It received approval in late July 2022 from Dubai’s Virtual Assets Regulatory Authority (VARA) to provide spot and derivatives exchange services to qualified institutional investors in the United Arab Emirates.
Including FTX US, FTX now offers compliant spot and derivatives trading services in the United States, Eurozone, Australia, Japan, Canada, and the United Arab Emirates.
Moreover, in a July interview with Bloomberg, FTX founder SBF hinted at plans to enter Latin America, currently evaluating the regulatory landscape in Brazil and Mexico.
On another front, Vident, the largest shareholder of South Korean exchange Bithumb, revealed ongoing discussions with FTX regarding a potential equity sale. Vident indicated this could involve either FTX acquiring Bithumb outright or purchasing a significant stake to gain partial management control.
Possibly in the near future, we may see FTX expand into Latin America and South Korea.
Source: Twitter @FTX_Chinese
Launching Stock Trading in the U.S.—Will Crypto Derivatives Be Next?
Among all regulatory jurisdictions, U.S. regulation serves as a global benchmark—complex, rigorous, and often ahead of international trends. Due to regional complexities, nearly every exchange attempting to enter the U.S. market has faced significant hurdles, apart from Coinbase. However, FTX made major breakthroughs this year, surpassing even Coinbase in spot trading market share and product diversity.
FTX US, the compliant exchange launched by FTX in the United States, initially only offered “spot trading.” But following its acquisitions of LedgerX and Embed, FTX US began offering “U.S. stock trading” and is currently discussing with the CFTC (Commodity Futures Trading Commission) the possibility of launching crypto derivatives.
The acquisitions of LedgerX and Embed are crucial.
LedgerX was originally a regulated U.S. “derivatives exchange,” holding three CFTC licenses: DCM (Designated Contract Market), SEF (Swap Execution Facility), and DCO (Derivatives Clearing Organization). Embed Financial is a regulated securities broker-dealer responsible for custody, trade execution, and clearing, and is also a member of the Financial Industry Regulatory Authority (FINRA).
Leveraging these two acquisitions, FTX US officially launched FTX Stocks at the end of July 2022, offering U.S. customers access to trade thousands of U.S.-listed securities, including common stocks and ETFs.
Meanwhile, FTX is proposing to the CFTC a model using “full collateralization” instead of traditional Futures Commission Merchants (FCMs). The system would recalculate margin positions every 30 seconds. If margin levels fall too low, FTX would begin liquidating user positions within seconds. As a last resort, positions could be sold at a pre-agreed price to liquidity providers.
This proposal is still under discussion, and SBF has been invited to participate in a CFTC roundtable. If approved, FTX US could launch crypto derivatives trading in the foreseeable future.
Even Amid Bear Market, FTX Keeps Winning
Following the collapses of TerraUSD, Celsius, and Three Arrows Capital, the crypto market underwent a major crisis. During this period, FTX provided assistance to several crypto startups, helping contain systemic risks and earning SBF the reputation of being the “lender of last resort” in the crypto market.
- FTX extended $480 million in credit to Voyager Digital and a $640 million revolving credit facility to BlockFi.
- Of the $640 million provided to BlockFi via FTX US, $240 million can be converted into equity in BlockFi, meaning FTX could potentially expand into the crypto lending sector.
Additionally, FTX continues to sign high-profile brand ambassadors across various fields, including NBA star Stephen Curry, legendary quarterback Tom Brady, Brazilian supermodel Gisele Bündchen, and MLB Hall of Famer David Ortiz.
As SBF previously stated, these partnerships aim to strengthen FTX’s brand value. He believes sports are one of the few truly borderless domains, and collaborating with athletes or teams helps the public quickly recognize FTX and understand its core mission.
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