FTX US, the United States-based division of the rising cryptocurrency exchange, announced today that it has raised a $400 million Series A funding round at a valuation of $8 billion.
The round included investors such as Paradigm, Temasek, Multicoin Capital, Lightspeed Venture Partners, and SoftBank Vision Fund 2, among others. It comes three months after parent company FTX raised its own round, which brought in $420.69 million in October at a valuation of $25 billion.
The Information reported in December that FTX was looking to raise a total of $1.5 billion more between its global and US businesses in a move that would value FTX at $32 billion and FTX US at $8 billion. While the latter valuation has since been confirmed, FTX has not yet announced additional funding outside of the U.S. division.
FTX US President Brett Harrison told Decrypt that the U.S. exchange started 2021 with about 10,000 customers and an average of $1 million in daily spot trading volume. It finished the year with 1.2 million users and about $350 million in daily trading volume, he said.
“We've grown tremendously from nothing, from relative obscurity into the fourth or fifth largest exchange in the U.S. in a very short period of time,” said Harrison, “whilst going up against a very competitive landscape of Coinbase, Kraken—these large, 10-year incumbents.”
The exchange plans to tap into the funding to boost its customer base further, whether through investment in its own products or digital marketing, along with acquiring additional top talent.
Harrison said that it could also explore further strategic acquisitions, whether it’s to secure licenses for new businesses—as FTX did with the LedgerX derivatives platform—or to gain access to more customers, like with FTX's Blockfolio app acquisition.
Harrison cited FTX NFTs—the division’s Solana and Ethereum NFT marketplace, launched in October—as a key driver of new customers. He described NFTs as a “great onboarding tool” that brings people into crypto that might not understand the nuances of blockchain networks or tokenomics but are interested in art and digital collectibles.
The platform’s December drop of NFTs from NBA player and FTX global ambassador Steph Curry resulted in some of the largest traffic FTX US has ever seen, Harrison said.
Looking forward, FTX US aims to expand its derivatives offering, with Harrison noting that only about 2% of crypto derivatives trading takes place on U.S. platforms. FTX US plans to launch margins, crypto futures, and options to retail traders in 2022. “There’s a huge, untapped market here in the U.S. for that kind of trading,” he explained.
Ultimately, the goal is to be a one-stop shop for all things trading, both crypto and otherwise. On top of expanding its derivatives offerings—which could also include equity index futures and fixed income futures—FTX US will also launch stock trading. Furthermore, as new FTX Ventures head Amy Wu recently told Decrypt, FTX US sees a huge opportunity to provide the infrastructure for NFT-driven crypto games.
Harrison believes that providing one, comprehensive platform for both crypto trading and other financial trades is key to keeping users within the ecosystem—and providing little reason to go elsewhere.
“If someone wants to invest in crypto and stocks, but those services are in two different places, then it means you need to move money around from the traditional financial system to these different accounts or apps,” he said. “That can cause a lot of friction.”
It may seem like a lot to take on, but given its expansion plans, FTX US has more than one rival in its sights: “Our goal in 2022,” Harrison said, “is to become a formidable competitor to Coinbase, Robinhood, the CME, and OpenSea.”