FTX Bankruptcy: Documents Show Coinbase Explored A Potential Acquisition

Recent documents have shown the San Francisco-based crypto exchange Coinbase had explored a potential acquisition of the European subsidiary of bankrupt crypto exchange FTX.

Coinbase Shows Interest In Acquiring FTX Europe

Reports from Fortune show that the crypto exchange Coinbase was interested in acquiring FTX Europe after its parent company FTX went bankrupt in November last year due to its highly profitable derivatives business and growing customer base.

The crypto exchange has shown its interest in acquiring the European arm of FTX on two occasions. The first was when the parent exchange went bankrupt in November last year, and now in September 2023.

Coinbase’s recent interest in acquiring the European subsidiary of FTX primarily focuses on the crypto exchange’s strategy to expand its presence globally in the crypto derivatives market amid the crypto exchange’s crackdown in the United States.

Crypto Derivatives are financial compacts that derive their value from an underlying asset such as Bitcoin (BTC) that is profitable for traders and the exchange, and they include options, futures, and swaps.

Coinbase is not the only crypto exchange that showed interest in acquiring FTX Europe. The report shows that other prominent crypto exchanges like Crypto.com, and Trek Labs have also mulled over acquiring the European arm of the exchange. 

Another reason behind prominent crypto exchanges’ interest in the European arm of FTX is due to the covetous derivatives trading license obtained by the firm following the grant of a Cypriot regulatory license. 

This gave FTX Europe an edge over other prominent crypto exchanges, making the crypto exchange the only platform offering a popular type of crypto derivative known as Perpetual futures in the European market.

However, Coinbase has now moved into the crypto derivatives market in the United States after the crypto exchange obtained its regulatory approval in August 2023.

FTX Europe is still currently up for sale and the firm’s sales deadline is set for September 24, 2023.

CEO Detained Before Court Trial

FTX’s Chief Executive Officer Sam Bankman-Fried has been denied his request for release two weeks before his court trial. The FTX CEO appealed for his bail hoping to attend his trial from the comfort of his home but unfortunately, his appeal was revoked.

The judge overseeing the case Judge Lewis Kaplan, rejected Bankman’s appeal and ordered the former FTX CEO to be detained at the Brooklyn Metropolitan Detention Center (MDC) before his trial on October 3, 2023.

One of the findings that influenced the Judge’s decision was that Bankman-Fried had reportedly tried to tamper with and influence the witnesses testifying against him. 

Judge Lewis’ decision to revoke Bankman’s bail appeal was reviewed by the three-judge panel of the 2nd US Court of Appeal to determine the accuracy of the decision. 

However, it was found that the decision was accurate and that there were reasons to believe that Bankman had acted with lawful intent to try and influence two witnesses against him.

FTT Token seeing small gains | Source: FTTBUSD on Tradingview.com

Featured image from Reuters, chart from Tradingview.com