It is known that FTX, a cryptocurrency derivatives exchange and NFT platform, has entered the brokerage startup market as part of a recently announced plan to expand support for stock trading.
The company announced on Thursday that its US-based subsidiary, FTX.US, will initiate commission-free stock trading through its app and allow users to fund their accounts with fiat-backed stablecoins.
The company has held closed meetings with at least three brokered startups in the past few months about potential acquisitions, citing sources that “the name was not disclosed because the deal negotiations were confidential,” according to a May 23 report from CNBC.
Three specifically named companies are Webull, Apex Clearing, and Public.com. All officials, including FTX, have yet to comment on the rumors.
All companies are registered with the Financial Industry Regulatory Authority (FINRA) and are members of the Securities Investor Protection Corporation (SIPC), indicating that they are on favorable terms with favorable government bodies such as the Securities and Exchange Commission (SEC).
A company registered with FINRA can trade stocks on behalf of its clients and being able to provide investment advice while becoming a member of the SIPC means that investors are financially protected if the company fails.
At this stage, it’s unclear whether FTX is primarily looking for startups to support stock-focused initiatives, or whether the company is also interested in larger acquisitions in the long term.
That speculation began to swirl after FTX founder and CEO Sam Bankman-Fried (SBF) earlier this month. submitted He filed with the SEC at the end of April that he had raised his stake in popular retail trading platform Robinhood to 7.6% for around $648.2 million.
According to Yahoo Finance, Robinhood (HOOD) has a current market cap of around $8.4 billion, which would require FTX to allocate a huge amount of capital to acquire the company.
However, SBF has explained in the past that ambitious acquisitions of the size of Goldman Sachs “are out of the question” if FTX continues its strong upward trajectory.
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However, the SEC filing doesn’t provide much clue as the SBF has no plans to actively participate in Robinhood and describes it as an “attractive investment” in HODL.
“Reporter intends to hold stock as an investment and does not intend to take any action to alter or affect the control of the issuer by participating in any transaction currently having such purpose or effect.”