The Well-Known Cryptocurrency Exchange FTX Plans to Acquire Brokerage Startups
FTX has been meeting with at least three brokers' startups in the past few months to discuss potential acquisitions as part of its plans to roll out stock trading services. Webull, Apex Clearing and Public.com are among the companies with which the exchange has met. Negotiations are in the early stages and the parties have not signed any agreements.
Webull was valued at $1 billion in a funding round in February 2021, the same year Public.com was valued at $1.2 billion. Apex Clearing was planning a merger with SPAC Northern Star Investment Corp. II at a valuation of $4.7 billion.
All firms are registered with the Financial Industry Regulatory Authority (FINRA) and are members of the Securities Investor Protection Corporation (SIPC), indicating that they are fully regulated and supervised by government agencies such as the Securities and Exchange Commission (SEC).
FINRA-registered firms can trade stocks on behalf of their clients, they are allowed to give investment advice, and SIPC membership means that investors are financially protected in the event a firm goes bankrupt.
It's unclear at this point whether FTX is primarily looking for startups to support its equity-focused initiatives, or whether the company also expects larger acquisitions in the long run.
Earlier, the U.S. subsidiary of FTX opened access to classic stock trading to a limited number of clients. The service is scheduled to roll out across the platform by the end of June.
The head of the exchange Sam Bankman-Fried then noted that the company does not charge commissions for transactions in securities and does not use the practice of "paying for the flow of orders.
Recall that in May 2022, Emergent Fidelity Technologies, an affiliate of Bankman-Fried, purchased a 7.6 percent stake in online brokerage Robinhood. The value of the securities exceeded $648 million.