Crypto exchange FTX valued at $32 billion amid bitcoin price plunge

Cryptocurrency exchange FTX saw its valuation swell to $32 billion in a new funding round announced Monday, highlighting continued appetite for the sector even as investors grow wary about a sharp pullback in crypto prices.

The Bahamas-based company said Monday that it raised $400 million in a Series C financing round — its third fundraise in the last nine months.

FTX, which offers derivatives products as well as spot trading, is one of the world’s largest digital currency exchanges. Once an obscure name, the firm has become a key player in the nascent market, rivaling the likes of Coinbase and Binance.

The company doesn’t offer trading in the United States. That function is provided by FTX U.S., its sister exchange. Last week, FTX U.S. announced a $400 million investment valuing the firm at $8 billion.

FTX said all investors in the U.S. affiliate, which included Singaporean state investor Temasek, SoftBank’s Vision Fund 2 and Tiger Global, jumped aboard for its own fundraise.

Having now raised a combined $2 billion in venture funding to date, FTX has built up a war chest at a time when digital currency prices have sunk considerably. Bitcoin is down 46% from its November record of almost $69,000, while other cryptocurrencies have slumped even further.

That’s led to fears the market may be on the cusp of a more severe downturn known as “crypto winter.” The last such occurrence happened in late 2017 and early 2018, when bitcoin tanked as much as 80% from its then-record high. Bear markets are typically bad news for crypto exchanges as it means volumes tend to dry up.

“I think we’re not entering a long term crypto winter,” Sam Bankman-Fried, FTX’s CEO and co-founder, told CNBC in an interview.

“There have been changes in expectations of interest rates, and that’s been moving crypto markets. But it’s been moving markets more generally as well.”

Indeed, stocks have taken a battering in recent weeks, with the Nasdaq down 11% year-to-date as investors reevaluate tech stocks amid concerns over higher interest rates from the Federal Reserve. Coinbase, FTX’s publicly-listed rival, has seen its shares slide 46% since debuting on the Nasdaq last April.

Asked whether his company could seek an initial public offering, Bankman-Fried said “it’s something we’ve been talking about.”

“I’m not sure whether we will. I could see it happening, I could see it not happening. We don’t feel like we have any particular need to do it.”

However, he said the firm will “try and be prepared, in case it’s something that we do end up wanting to do.” Such preparations would include audited accounts and a review of possible listing options, he added.

While the crypto market has seen seismic growth over the past couple of years, regulators have become increasingly wary about digital assets, concerned about their use in scams…