Crypto exchange FTX to buy Japanese rival Liquid

FTX, the cryptocurrency exchange owned by billionaire Sam Bankman-Fried, is buying Japanese rival Liquid for an undisclosed sum.

The company said Wednesday it had entered into an agreement to acquire Liquid and all its operating subsidiaries, including Quoine Corporation and its Singapore-based unit. Quoine was one of the first crypto exchanges to obtain registration with Japan’s Financial Services Agency in 2017.

FTX said it expects the acquisition of Liquid to close by March 2022. The deal is subject to regulatory and shareholder approval.

“Following FTX’s acquisition of Liquid, 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,” Liquid said in a statement Wednesday.

“In connection with this acquisition, FTX has also entered into an agreement with Liquid to provide its existing Japanese users with services in compliance with Japanese laws, and will transfer its existing Japanese users to Quoine.”

FTX, which earlier this week announced it had raised $400 million at a $32 billion valuation, is expanding aggressively in the Asian crypto market at a time when competition in the space is heating up.

Bankman-Fried told CNBC a large focus for the firm was acquiring licenses in several countries.

Traditional lenders like Japan’s SBI and Singapore’s DBS have been making moves in the space to capitalize on crypto’s wild growth. SBI is a minority shareholder in a number of crypto start-ups, including the $15 billion company Ripple, while DBS has set up its own digital asset exchange.

Founded in 2014, Liquid is one of the world’s largest crypto exchanges by volume, with nearly $72 million in daily trading volumes, according to CoinMarketCap data. It offers both spot trading in digital currencies such as bitcoin, ether and XRP, and financial derivatives which allow investors to speculate on price movements.

The company suffered a major hack last year which saw the cybercriminals make off with more than $90 million worth of funds. Not long after the attack, FTX lent Liquid $120 million in debt financing. Liquid at the time said the funds would be used to “strengthen its capital position,” and that the two firms would pursue “further collaborative opportunities.”

Bahamas-based FTX offers crypto spot trading and derivatives products in a number of territories around the world — with the exception of the U.S., where its services are provided by an affiliate called FTX U.S.

FTX U.S. last week said it had raised $400 million in its first external fundraise, in a deal valuing the company at $8 billion.