If you’ve been on Crypto Twitter over the past few months, you’ve likely heard the name “FTX” tossed about.
For those who missed the memo, FTX is a cryptocurrency-centric derivatives exchange built by veterans of Wall Street (Jane Street, Susquehanna, and Optiver) and other financial markets. The platform offers high levels of leverage, much like BitMEX or ByBit, and offers a slew of custom investment vehicles, like the “S**tcoin” perpetual swap, giving investors other ways to trade their capital.
Despite the fact that it’s a new entrant into a crowded space, FTX was reported just minutes ago to have secured an investment from Binance, ” the world’s leading cryptocurrency exchange and blockchain ecosystem.”
According to a press release published on the matter, the two companies will “work together to further develop the cryptocurrency ecosystem,” presumably with a focus on the financialization side of Bitcoin and its ilk. Indeed, the Binance release on the matter elaborated that FTX will help build out the “liquidity and institutional product offerings” of Binance, especially the firm’s over-the-counter desk.
This partnership also sees Binance take up a long-term long position in the FTX Token (FTT), “to help enable the sustainable growth of the FTX ecosystem, aligning with the broader scope of the partnership.” (FTT is up 16% in the past 24 hours, rallying on this news.)
As to why the two firms, which would have previously been seen as competitors in the crypto industry, are working together, Changpeng “CZ” Zhao of Binance explained:
“The FTX team has built an innovative crypto trading platform with stunning growth. With their backgrounds as professional traders, we see quite a bit ourselves in the FTX team and believe in their potential in becoming a major player in the crypto derivatives markets.”
This news comes shortly after FTX raised $8 million from a number of venture capital firms and investors in the Bitcoin space. This previous round was led by Proof of Capital, a venture capital fund that is run by HTC’s Phil Chen, Greylock Capital’s Chris McCann, and 500 Startups partner Edith Yeung. Other firms that participated in this previous round, which took place in August, include Consensus Lab, FBG, and Galois Capital.