FTX Buys Undisclosed Stake in IEX Group

The FTX bitcoin exchange in the United States has decided to buy a stake in IEX Group Inc, in order to work on technical and regulatory initiatives as well as improve digital asset access for institutional and individual investors.

Competition authorities must yet approve the deal. This would be IEX’s first notable venture into the area of digital asset trading, as it wants to offer institutional investors exposure to digital assets, as it was highlighted in a Michael Lewis book called “Flash Boys.”

Four former Nasdaq workers (one of whom was Brad Katsuyama) decided to start their own alternative trading platform in 2012, and IEX was born. Katsuyama rose to prominence as the author of the book “Flash Boys,” which claimed that the US stock market is set up to benefit high-speed traders.

IEX is one of the world’s first fully registered exchanges, although it faces stiff competition from traditional stock market operators, accounting for only 2.7 % of stocks volume in March 2022, compared to 17 % for the Nasdaq.

FTX has a well-defined expansion strategy

The newly acquired interest will help FTX extend its position in the United States by focusing on equities trading and institutional clients. Following the announcement, Sam Bankman-Fried (SBF), chief executive officer of FTX and FTX US, commented, “With this investment, we’re aligned with one of the most trusted and creative organizations in capital markets.”

Binance, a global leader in cryptocurrency exchanges, teamed up with Amun AG, a renowned Swiss cryptocurrency issuance firm, to establish the Binance Smart Chain (BNB) ETP on the SIX Swiss Exchange’s regulated arm.

Bankman-Fried is also interested in bitcoin options, swaps, and futures as part of FTX’s US development, focusing on the trading volume handled by rival Coinbase Global Inc., which has outpaced its nearest competitor Binance in terms of growth. In the United States, Binance’s partner platform has a restricted selection of cryptocurrencies and does not support margin or futures trading.

In a recent interview, SBF stated, “Ideally, I would like FTX to become the world’s largest source of financial transactions.”

FTX partnership with CoinShares

FTX Global and CoinShares recently formed another cooperation to help bridge the gap between traditional finance and digital assets. The partnership will develop SOL ETP, a physically-backed exchange-traded product that will split staking rewards with investors.

CoinShares aims to increase the trustworthiness and transparency of digital assets. The exchange platform will be able to provide access to institutional investors as a result of its cooperation with FTX. Furthermore, investors will be able to trade FTX ETPs on other exchanges as well.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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