FTX Acquires Japanese Crypto Exchange Liquid

Despite the turbulent start of 2022 and the fears of a bear market incoming, crypto exchanges like FTX seem to be doing well, as the Bahamas-based exchange announced a merger-and-acquisition deal with Japan’s Liquid Group and its operating subsidiaries.

FTX is not only acquiring Liquid but also its Quoine Corporation and Quoine Pte. in Singapore. Quoine managed to become one of the first crypto exchanges registered by Japan's financial regulator in 2017.

The deal, when disclosed, would see Liquid providing its existing Japanese users with services in compliance with Japanese laws, as well as transferring its existing Japanese users to Quoine, with effect from 30 March 2022, as Quoine is a fully owned subsidiary of Liquid and is a licensed Japanese crypto-asset exchange and Type I Financial Instruments Business licensee.

Furthermore, Quoine will gradually integrate FTX's products and services into its own offering, and FTX's existing Japanese customers will be migrated to Quoine's platform.

The deal between FTX and Liquid may seem a bit odd, especially given Liquid’s first investment round valuation of over $1 billion, and $60 billion of annual trading volumes in 2019 alone.

FTX and Liquid have shaken hands prior to the acquisition, with FTX providing $120 million in debt financing after Liquid got hacked in August 2021, resulting in a $100 million loss for the Japanese exchange.

The news comes amid an intensified acquisition spree by both FTX and its U.S. subsidiary back in August 2020 when FTX bought crypto portfolio management app Blockfolio for $150 million, while FTX US recently completed the acquisition of crypto derivatives exchange LedgerX.

FTX also announced a $400 million funding in a Series C funding round, which also happened to FTX U.S. Both exchanges are currently valued at $32 billion and $8 billion, respectively, securing them a spot amid contenders like Coinbase and Binance.

However, the moves also come amid a global concern that a more severe downturn in the crypto market is near. The so-called “crypto winter” may be considered as a cyclic event, as the last time the crypto sector tanked was in early 2018 when Bitcoin fell from its first notable high of just above $20,000 only to lose 80% of its then-record high.

The CEO of FTX, Sam Bankman-Fried, however, doesn’t believe a bear market is imminent.

“I think we’re not entering a long-term crypto winter, as there have been changes in expectations of interest rates, and that’s been moving crypto markets. But it’s been moving markets more generally as well”, Bankman-Fried commented.

The traditional stock market reacted with a downtrend to the higher interest rates plans from the Federal Reserve, which are a desperate approach to combat the COVID-19-induced inflation. Nasdaq, for example, is trading with 11% in the red year-to-date amid investor reevaluation of tech stocks.

Furthermore, indices like S&P 500 and Dow Jones are also trading in the red since the start of 2022, but the trend is positive, especially after reaching a bottom on January 28.

Source: CryptoBrowser

The crypto market is a witness to a similar pattern, with almost all of the top-performing cryptos trading in the green on the weekly chart. Bitcoin, for example, is up two percent weekly, while projects like Ethereum and Solana are up double-digits when compared to last week.

However, cryptos like Terra (LUNA) and Cosmos (ATOM) are deep in the red, down by 18% since last week.