Following the launch of its stock trading platform, FTX crypto derivatives exchange is reportedly looking for brokerage start-ups as it met with at least three brokerage start-ups over the past few months.
Last Thursday, the company announced that its US-based subsidiary FTX.US would begin offering zero-commission stock trading via its app, as well as the ability to fund accounts with fiat-backed stablecoins.
According to a May 23 story from CNBC, the business has held private discussions with at least three brokerage firms over the past few months discussing potential acquisitions, citing people who “requested not to be named because the purchase conversations were confidential.”
Webull, Apex Clearing, and Public.com were three companies expressly mentioned. All parties, including FTX, have yet to respond to the rumors.
All of the firms are members of the Securities Investor Protection Corporation (SIPC) and registered with the Financial Industry Regulatory Authority (FINRA), implying that they are on good terms with government watchdogs like the Securities and Exchange Commission (SEC).
FINRA-registered firms can trade stocks on behalf of their clients and provide investment advice, while SIPC membership ensures that investors are financially protected if the firm fails.
It’s unclear at this point whether FTX is exclusively interested in start-up companies to support its stock-focused operations, or if the company is also interested in larger acquisitions in the long run.
FTX founder and CEO Sam Bankman-Fried (SBF) filed a statement with the Securities and Exchange Commission (SEC) in late April stating that he had increased his interest in popular retail trading platform Robinhood to 7.6% for about $648.2 million.
According to Yahoo Finance, the current market capitalization of Robinhood (HOOD) is $8.4 billion, implying that FTX would have to spend a significant amount of money to acquire the company.
SBF has previously stated that if FTX continues on a strong upward growth trajectory, ambitious acquisitions on the scale of Goldman Sachs “is not out of the question.”
The SEC filing, on the other hand, provides little hints, stating that SBF has no plans to actively participate in Robinhood, instead presenting it as an “attractive investment” for HODL.
The statement stated, “The Reporting Persons plan to hold the Shares as an investment and do not currently have any intention of taking any action to change or influence the Issuer’s control, or participate in any transaction having that purpose or effect.”