Documents seen by Fortune suggest that Coinbase has been looking into the possibility of acquiring FTX Europe since September 2023.
Coinbase, a crypto exchange, considered buying FTX Europe to expand its derivatives business but didn’t proceed with the deal. This shows Coinbase’s interest in entering the derivatives market and growing its global presence.
Despite FTX’s parent company going bankrupt in November 2022, FTX Europe continued to attract thousands of new users, making its license valuable. The FTX estate decided to auction parts of the business, drawing interest from potential buyers, including Coinbase.
However, Coinbase eventually abandoned the idea. This move aligns with Coinbase’s strategy of exploring offshore derivatives exchanges in Asia due to regulatory uncertainties in the US.
Coinbase expressed interest in acquiring FTX Europe shortly after FTX’s bankruptcy in November 2022. This interest persisted until early September 2023 when a European executive from Coinbase explored the possibility of the acquisition. However, Coinbase eventually decided not to proceed with the deal, as confirmed by someone familiar with the discussions.
In the US, regulatory restrictions have created uncertainty in the crypto derivatives trading market. Consequently, Coinbase has been actively developing an offshore derivatives exchange with a focus on the Asian market. Additionally, Coinbase is advocating for greater regulatory clarity in the US cryptocurrency market.
Coinbase has a history of actively acquiring companies in the derivatives sector, including the futures exchange FairX. A spokesperson for Coinbase stated, “We’re constantly assessing opportunities to strategically grow our business and engage with various teams worldwide.”
Previously, Fortune reported that several potential buyers were interested in FTX Europe, including Crypto.com and FTX FDM. FTX FDM is the Bahamian branch of FTX, and it is currently under the oversight of liquidators appointed by the Supreme Court of the Bahamas.
FTX Europe: A Flash Point
FTX Europe, which was acquired by FTX in 2020, faced financial challenges despite its profits. In July, the bankruptcy estate led by former Enron executive John Ray III initiated legal action to recover hundreds of millions of dollars from FTX Europe’s leadership. They argued that the acquisition had been a costly move, spending $376 million to acquire a $2 million operating license.
While FTX Europe garnered interest from major crypto companies recently, the estate initially believed a sale was not feasible. However, offers from Coinbase and Trek Labs have added complexity to the situation, prompting an extension of the proposed sale deadline from September 17 to September 24.
The FTX Debtors expressed their commitment to maximizing asset value for customer recoveries.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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