FTX.US receives $8 billion valuation as it looks to bring derivatives to the U.S.

FTX.US, the U.S. affiliate of crypto exchange FTX, announced today that it has raised $400 million. This was the company’s first external funding round, which gave it a valuation of $8 billion.

A $400 million bet on FTX’s U.S. presence

The sharp market downturn we’ve seen in the past few weeks failed to shake investor confidence in the crypto industry. This is most evident in the latest fundraising round FTX’s U.S. subsidiary completed, which put the company’s valuation at $8 billion.

FTX.US completed its first external fundraising round, receiving $400 million in investment from Softbank’s Vision Fund 2, Temasek, and the Ontario Teachers’ Pension Plan Board.

This is a huge success for FTX.US, which launched trading on its platform only in May 2020. Alameda Research, the parent company of the FTX exchange, established FTX.US to distinguish it from the main exchange as the U.S. government began to tighten its regulation of the crypto market.

FTX.US hopes that the investment will help it beat Coinbase and Robinhood, its biggest competitors in the country. Brett Harrison, the president of FTX.US, told CNBC that the company will use a big portion of the investment to explore derivatives.

He said that the U.S. market for crypto derivatives is still in its infancy, lagging behind the international market both in size and volume. The exchange’s investors recognized FTX’s potential to bring some of that volume to the U.S.

This is in line with FTX’s broader plan for expansion. In October last year, the company acquired LedgerX, a crypto futures and options exchange.

Investments could speed up regulation

Investments like these, which value crypto exchanges in the billions, could significantly speed up regulation in the U.S. President Joe Biden’s administration is reportedly looking to issue an executive order calling for more regulation in the crypto market.

The order, which is expected to be delivered as early as February, could ignite a massive push for regulation throughout the entire government, with market watchdogs such as the SEC and the CFTC expected to come out each with their own legal framework.

Harrison said that officials in Washington have two major concerns with crypto—stablecoins and exchanges. And while the issue of stablecoins seems to be more pressing for Washington, Harrison notes that oversight of exchanges should be the government’s primary focus.

Crypto exchanges in the U.S. are regulated as money transfer businesses, which means they’re subject to a set of rules designed to regulate the traditional financial market. Harrison claims that this isn’t a sustainable long-term future, neither for crypto exchanges operating in the country, nor the entire crypto market.

What FTX hopes is that Washington will implement much stricter oversight over crypto exchanges and introduce tight, but well-defined rules against market manipulation.