Binance has made a minority investment in the derivatives exchange FTX becoming the first outsider investor in the firm. As part of the deal announced on December 19, the crypto trading platform company acquired equity in the FTX derivatives firm. Additionally, it bought long positions in the FTX native Token, FTT. In that context, Sam Bankman-Fried, FTX founder and CEO said:
“The investment will help accelerate the growth of FTX with support and strategic advisory from Binance while FTX maintains its independent operations.”
The CEO also said that the investment was in the “tens of millions” range giving FTX a valuation of “hundreds of millions of dollars.” Bankman-Fried also leads the Alameda Research crypto-trading firm.
FTX registers around $500 million in daily volume becoming the 7th biggest Bitcoin futures exchange as reported by Skew analytics provider. Futures trading volume is bigger than spot trading of Bitcoin. It has also grown in importance for exchanges since most crypto prices dropped in the second half of 2019.
Binance joined the derivatives market this fall. Currently, it is the fourth-largest Bitcoin futures exchange globally. The chief executive officer of Binance, Changpeng Zhao, said that the derivatives space for cryptocurrency is significantly new and the firm wants to support many initiatives to grow the nascent industry.
The Binance FTX Investment
Binance got a ‘double-digit’ ownership percentage in the exchange. FTX is incorporated in Antigua and has almost 25 employees with Bankman-Fried being the majority owner of FTX. Binance and Alameda Research will work even more closely as part of the transaction. Alameda is set to continue offering liquidity across Binance’s platforms.
Binance and FTX will also join in tokenizing and listing assets.
With this deal, FTX will assist in the development of various Binance products especially its flagship exchange, Binance.com. It will also help in the development of the over-the-counter (OTC) trading desk. FTX also plans to develop a suite of products complementary to tokenized ecosystems and Binance will help.
FTX was founded in the spring of 2019 and was an incubation project for Alameda Research. It offers futures, spot, OTC, and indexes trading services. Changpeng “CZ” Zhao commented:
“The FTX team has built an innovative crypto trading platform with stunning growth. We see quite a bit of ourselves in the FTX team and believe in their potential in becoming a major player in the crypto derivatives markets.”
This investment comes after Binance’s September acquisition of JEX helping the exchange add options and futures to its trading platform.
Online Bitcoin Trading in Australia
Australia’s Binance Lite partnered with POLi Payments enabling users to buy Bitcoin with zero fees directly on their site. That feature was live and active by December 20. The crypto brokerage firm said that it is the first of many cryptos to be availed online by Binance’s Australian operation. More digital assets will be announced early in 2020.
Before the partnership, Binance Lite only accepted over the counter payments at 1300 retail locations. Thus, it is a significant upgrade. Physical transactions cost 2.5% to cover the merchant’s time and overheads. But, the new online service will not charge anything until March 2020. Afterward, the fee will be 0.5%.
Binance Lite has an escrow feature that locks real-time Bitcoin prices instantly when purchased while waiting for the funds to clear which may take up to three days. But, subsequent transfers clear in a day or less. Users must pass all the KYC identity verification checks as stipulated by Australian law.
“This new service through the integration with POLi Payments marks the start of our larger plans to make crypto more accessible in Australia”, explained Changpeng Zhao.
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