FTX, a US cryptocurrency exchange, has made a strategic investment in IEX Group, a licensed national stock exchange. According to sources, FTX will become the largest stakeholder in IEX Group after the acquisition. The acquisition of IEX Group by FTX is scheduled to close in May currently awaiting usual closing conditions and regulatory approval.
This would be IEX’s first noteworthy push into the realm of digital asset trading, since it intends to give institutional investors exposure to digital assets, as it was mentioned in Michael Lewis’ book “Flash Boys.”
IEX was created in 2012 by four former Nasdaq workers (one of whom was Brad Katsuyama) who wanted to create their own alternative trading platform.
IEX was one of the world’s first fully registered exchanges, but it faces stiff competition from traditional stock market operators, accounting for only 2.7 percent of stocks trading in the United States in March 2022, compared to the Nasdaq’s 17 percent.
The newly acquired interest will also help FTX to strengthen its position in the United States by focusing on equities trading and institutional clients.
Following the announcement, Sam Bankman-Fried (SBF), CEO of FTX and FTX US, stated:
“With this investment, they will link with one of the most trusted and creative organisations in capital markets: IEX Group.”
Bankman-Fried is also interested in bitcoin options, swaps, and futures as part of FTX’s development into the US, with rival Coinbase Global Inc. handling trade volume in the US and posting growth significantly outperforming Binance, its closest competitor. Binance’s US partner platform offers a restricted variety of cryptocurrencies and does not facilitate margin or futures trading.
