Crypto derivatives platform FTX receives massive investment from Binance

Crypto derivatives platform FTX receives massive investment from Binance
Written by:
Ali Raza
20th December 2019
Updated: 11th March 2020
  • Recent reports indicate that Binance made a large investment into a crypto derivatives platform, FTX.
  • It is not known how much the exchange had invested, although some claims mention 'tens of millions.'
  • This represents Binance's second large investment in a crypto derivative platform in 2019, with the first being JEX, now known ad Binance JEX.

One of the world’s largest crypto exchanges, Binance, made headlines recently when it expressed interest in the crypto derivatives platform, JEX, back in September. Now, the exchange made the same move once more, this time acquiring an equity stake in another derivatives platform, FTX.

FTX is a crypto derivatives platform backed by Alameda Research. Neither the exchange nor the platform revealed the amount that Binance decided to invest in FTX, however, some sources claim that the investment includes tens of millions.

However, there will be a few differences to Binance’s approach to FTX, when compared to how the exchange handled JEX. For instance, the exchange will not rename the platform. As some may know, JEX was renamed to Binance JEX after Binance’s investment. FTX, on the other hand, will keep its own name, meaning that it will operate as an independent entity.

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FTX achieved impressive growth in only six months

Alameda Research’s and FTX’s CEO and founder, Sam Bankman-Fried stated that Binance’s strategic advisory and investment will help FTX’s growth and that Binance is the only outside investor that the platform has. Furthermore, both firms will work on creating better crypto trading platforms and products.

Binance’s goal is to help FTX become larger and faster, while the platform will help Binance create better liquidity and institution-friendly products on its own exchange and OTC trading desk. In addition, Binance went long on FTX’s own cryptocurrency, FTT.

Binace’s CEO, Changpeng Zhao, stated that the FTX team managed to create a very innovative crypto trading platform, which has already achieved impressive growth.

FTX itself is quite a young platform, which was launched earlier this year, in May. So far, it managed to reach a $500 million in daily trading volume, according to its own claims. However, its shares remain rather low in price, since BitMEX, OKEx, and Huobi are currently go-to platforms for derivatives.

Binance is catching up, however, and it currently offers futures in BTC, ETH, and BCH, all of which are paired against USDT. Binance also offers trading with leverage, going up to 125x. BitMEX, on the other hand, only offers 100x, and that’s only for some of their contracts.

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