Coinbase explores acquisition of FTX Europe; Former FTX lawyers deny allegations of assisting fraudulent activities; Coinbase bitcoin holdings revealed!
FTX Europe acquisition under consideration by Coinbase
Coinbase, the largest cryptocurrency exchange in the US, has been exploring the acquisition of FTX Europe following the latter’s bankruptcy.
According to Fortune, the company held talks to acquire FTX’s European presence in order to build out crypto derivatives offerings.
While the acquisition talks never reached an advanced stage, the research shows the importance Coinbase places on derivatives.
Crypto derivatives, which derive their value from assets such as Bitcoin and Ether, account for a significant portion of volume. In fact, research has shown that derivatives are more popular than spot trading.
According to data from crypto analytics firm Kaiko Research, in the second quarter of 2023, derivatives volumes were almost six times higher than spot volumes.
Regulators taking a cautious approach to derivatives
In Europe and the US, crypto derivatives continue to cause confusion. FTX Europe was the first company to offer crypto derivatives in Europe, thanks to a licence from the Greek Cypriot Administration of Southern Cyprus, until the bankruptcy of its parent company FTX. FTX Europe was originally acquired by FTX in late 2021 for $376 million.
According to documents seen by Fortune, FTX Europe continued to sign up thousands of new users until its parent company went bankrupt.
Coinbase’s interest in FTX Europe began in September 2023. The company’s European executives explored an acquisition, but Coinbase was not interested in a deal, according to a source with knowledge of the negotiations.
Former FTX lawyers deny allegations of assisting fraudulent activities!
A law firm that formerly served the failed exchange FTX has dismissed a class action lawsuit against them for allegedly assisting the exchange’s alleged fraudulent activities.
According to a court filing on 21 September, Fenwick & West, a US law firm, has denied all allegations of wrongdoing in connection with the provision of legal services during the operation of FTX.
The Claimants allege that although Fenwick provided regular legal advice in accordance with the law, Sam Bankman-Fried misused that advice to further his fraudulent activities.
The filing also reiterated that Fenwick helped set up the companies Bankman-Fried used in his fraud and advised FTX on regulatory compliance in the evolving crypto environment.
However, Fenwick argued that it should not bear responsibility because it was not the only law firm representing FTX. He argues that he played a relatively minor role in providing various aspects of legal advice to the bankrupt exchange.
If the plaintiffs’ allegations were sufficient to state a claim of conspiracy and aiding and abetting liability against Fenwick, then any lawyer could be taken to court and forced to account for his or her client’s misconduct. This is not the law.
This development comes after FTX debtors filed a lawsuit against former employees of the Hong Kong-based company Salameda, which was previously affiliated with the FTX group.
Coinbase bitcoin holdings revealed!
Blockchain analytics platform Arkham has recently discovered that Coinbase’s wallets hold approximately 1 million bitcoin (BTC). This amount is worth more than $25 billion at current market prices for BTC.
According to Arkham, the amount held by the exchange represents nearly 5 percent of all existing bitcoins. Coinbase holds a total of 947,755 BTC, Arkham said. According to CoinGecko, the supply of Bitcoins in circulation is currently around 19,493,537.
In addition, Arkham said he has identified and tagged 36 million bitcoin deposit and holding addresses used by the exchange. According to Arkham, Coinbase’s largest cold wallet holds around 10,000 BTC. Based on the exchange’s financial filings, the intelligence firm believes Coinbase has more bitcoin that has not yet been tagged and cannot be identified, Arkham said.
While Coinbase holds more than $25 billion worth of BTC in its wallets, the exchange only holds about 10,000 of the total bitcoin it holds, worth about $200 million, according to the latest data.
When it comes to corporate bitcoin ownership, business intelligence firm MicroStrategy still holds the most BTC. In earnings results published on 1 August, the company’s co-founder Michael Saylor revealed that the company owns 152,800 BTC, worth over $4 billion at the time of writing.
