Key Takeaways
- FTX’s head executive, Sam Bankman-Fried, stated on Monday that the company has no aspirations to acquire Huobi, which is based in China and manages one of the world's biggest cryptocurrency exchanges.
- He did so on Twitter, convincing his presumably befuddled followers that Huobi was not being acquired by the cryptocurrency exchange.
FTX’s head executive, Sam Bankman-Fried, stated on Monday that the company has no aspirations to acquire Huobi, which is based in China and manages one of the world's biggest cryptocurrency exchanges. He did so on Twitter, convincing his presumably befuddled followers that Huobi was not being acquired by the cryptocurrency exchange.
This reality followed an announcement made on Friday by Leon Li, the creator of cryptocurrency exchange Huobi Global, that he was negotiating to sell majority ownership of the business, putting its value at $3 billion or more.
According to the report, Li has been in preliminary talks with several well-known figures in the cryptocurrency world about selling nearly 60% of the company. These figures include Justin Sun, Tron blockchain network founder, and FTX chief executive, billionaire Sam Bankman-Fried.
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FTX Denies Any Plans To Acquire Huobi
Justin Sun officially declared that their business was not engaged in any discussions regarding this issue. In light of this recent declaration, Sam Bankman-Fried has also now followed suit to express that FTX also has no interest in this deal.
The Bitcoin market has suffered dramatic falls this year, with situations ranging from geopolitical unrest to the tightening of complex financial protocols and inflation that have gone on for several years, coinciding with a general risk-off mood in the markets.
This reality keys into why this billionaire got the label as the new Warren Buffett. He made several investments during the current weak market in cryptocurrencies, and as a result, many businesses benefited from the monetary support his endeavors provided.
While FTX didn't nurture any plans to acquire Huobi, it doesn't negate the reality that the company hasn't looked into other potential acquisitions this year. To begin with, Celsius’s crypto lending service was considered for acquisition earlier in June, but due to the enterprise's dire financial situation, FTX didn't proceed further. That month also saw FTX acquire the Canadian cryptocurrency asset trading platform.
In July, BlockFi, a cryptocurrency lender, received a $250 million open-end credit from FTX. However, when Three Arrows Capital stopped accepting withdrawals, BlockFi followed suit. As time went on, BlockFi received praise from Bankman-Fried for its meticulous risk oversight and grounded governance in getting rid of problematic counterparties ahead of time.
The quantitative trading company Alameda, another Bankman-Fried-owned business, moved to assist the struggling cryptocurrency broker Voyager Digital with $500 million to support their efforts in allowing consumers to receive liquidity ahead of time through FTX and partially recoup some of their money. In an unexpected turn of events, Voyager declined this assistance, calling it a ploy to get notoriety.
Revelations have also been made by Vidente, the largest shareholder in the South Korean cryptocurrency exchange Bithumb, that FTX is discussing acquiring the company. This action, as reported, is set to happen either directly or through co-management of Vidente's shareholding in Bithumb.
Despite the fact that all of these alleged purchase proposals haven't materialized, FTX's significant income and standing indicate that it is probably looking into substantial transactions in the sector.
Disclosed records examined by CNBC revealed that FTX's sales increased by almost 1,000% in the previous year.
Despite investing millions in marketing initiatives, such as 2022 Super Bowl advertisements and the naming rights to Miami's NBA arena, the company's valuation climbed from $90 million in 2020 to above $1 billion in the following years during the market's climax.
What are your thoughts on the recent disclaimers made in light of these acquisitions? Do you think there are more reasons behind this development? Please share them with us in the comment section.
