Some of the world’s most prestigious financial institutions could become acquisition targets for young cryptocurrency companies, according to the 29-year-old chief executive of digital coin exchange FTX.
Sam Bankman-Fried told the Financial Times the company he founded in 2019 could consider buying an established financial institution such as US banking giant Goldman Sachs or exchange CME Group, once it overtakes rivals Coinbase and Binance.
“If we are the biggest exchange, [buying Goldman Sachs and CME] is not out of the question at all,” said Bankman-Fried.
The statement underscores how a tighter focus from regulators has not dulled the grand ambitions of senior executives in the rapidly growing cryptocurrency sector, where valuations for companies they founded just a few years ago match or surpass banks with a century or more of history behind them.
For now, these ambitions remain a stretch; FTX is seeking a valuation of around $20bn in its latest funding round, Bankman-Fried told Nikkei Asia, the FT’s sister publication, in a recent interview. Goldman Sachs has a market value of near $135bn and the CME weighs in at about $76bn.
But rival exchange Coinbase was valued at $76bn, the same amount as French banking giant BNP Paribas at the time of its public offering earlier this year, while crypto-focused payments company Circle announced its plans to list on public markets with a valuation of $4.5bn this week.
Bullish, the decentralised exchange backed by a group of billionaire investors, announced plans to list in New York through a Spac deal with a valuation of around $9bn. Bankman-Fried said FTX has considered going public on a traditional exchange, but for now such plans are on hold.
“We are in a fortunate position of not having to do it because we don’t need capital . . . on the other hand there are potentially big advantages to listing such as brand recognition,” he said. “We are not actively looking to list but we want to be in a position to go ahead if we want to.”
Bankman-Fried is worth an estimated $8.7bn, according to Forbes, from his ownership of FTX and cryptocurrency market maker Alameda Research, which he founded in 2017. He is now in a new fundraising round for an undisclosed sum.
“M&A is going to be the most likely use of the funds,” he said, without naming a likely target. He told Nikkei Asia that the new capital will be spent on make acquisitions to targeting retail investors and extending the company’s reach.
Unlike many crypto evangelists, Bankman-Fried says traditional financial markets and digital currencies will exist in parallel, with complementary roles. Regulation is also inevitable, although it will take years for a global regulatory framework to emerge, in his view.
“The biggest change we’ve seen in the last year is that crypto has got big enough for regulators to care,” he said.