FTX valued at $32bn as blue-chip investors pile into crypto groups

Cryptocurrency exchange FTX has been valued at $32bn in a new funding round announced on Monday, as blue-chip investors continue to pile into the hype-fuelled sector.

Existing investors including Japan’s SoftBank and Canada’s Ontario Teachers’ Pension Plan were among those that participated in a new $400m investment round for the Bermuda-based group, the third time FTX has gained new funds in six months.

The company, led by 29-year-old crypto billionaire Sam Bankman-Fried, was valued at $25bn in its previous fundraising announced in October last year. In 2020, FTX was worth just $1.2bn.

Bankman-Fried said the latest “financing round represents a milestone achievement for FTX, as we raised close to $2 billion in six months”.

The deal illustrates the voracious appetite of traditional investors for companies that operate in the world of digital assets, with billions of dollars flowing into a sector that advocates say represents a new frontier for finance but sceptics warn leaves many retail investors at risk of losing huge sums.

FTX’s valuation has surpassed more traditional financial institutions such as Germany’s Deutsche Bank, which has a market capitalisation of $25bn.

Separately from Monday’s announcement, the company’s US operation was valued at $8bn after raising $400m last week, including funding from Singaporean state investor Temasek, SoftBank’s Vision Fund and US investment group Tiger Global.

The hefty price tag comes despite the large drop in cryptocurrency prices in January, which saw bitcoin lose 20 per cent of its value.

That trend has hit rival exchanges, with shares in Coinbase falling more than half since the company listed on Nasdaq in April, trimming $50bn from its market value. Crypto exchanges have responded with a flurry of new listings for coins and tokens that could draw the attention of global financial regulators.

FTX said its new valuation reflected the significant growth the company had seen in the past six months, including a 60 per cent growth in the number of its users and a surge in daily volumes traded on the platform, which stands at about $14bn a day. FTX is the third-largest crypto exchange after Binance and Coinbase.

FTX was launched in May 2019 by Bankman-Fried, two years after he set up crypto trading company Alameda Research. In January, FTX added a venture capital investment arm with a $2bn war chest.

Bankman-Fried said the latest funding “will support our continued mission of delivering innovative products and services . . . as well as expanding our global reach with additional licenses around the world”.