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PwC Reports Huge Shift in M&A and Fundraising from US to Asia and EMEA in 2019

In 2019, crypto fundraising and M&As began migrating over to Asia, Europe and the Middle East and saw a lack of new VC investments as the majority of funding came from crypto firms within the industry, according to PwC’s latest report released on April 6.

PwC Global Crypto Lead, Henri Arslanian discussed the 2nd Global Crypto M&A and Fundraising Report’s findings with Blockchain.News and offered his take on what they mean for the digital ecosystem.

Crypto fundraising and M&A moving to Asia and EMEA

As outlined in the report, the majority of global crypto fundraising and M&A deals in 2019 took place outside of the United States with increased activity in both APAC (29%) and EMEA (22%) recorded.

In 2019, it was found that traditional VCs, crypto-focused VCs and family offices represented the majority source of new funding, with a share of 57%, for crypto companies. These new findings mean that crypto firms now represent the majority of M&A in the sector which is an increase compared to 2018’s 42%.

Arslanian said, “We expect to see APAC and EMEA play a bigger role in the global crypto fundraising and M&A space. In particular, we expect to see more APAC and EMEA based family offices looking at the market turbulence as a good time to invest in promising crypto companies.”

In total, the number of M&A deals recorded in the report dropped from 189 in 2018 to 114 in 2019, while the actual value of M&A deals plummeted by 76 percent from nearly two billion dollars to just under half a billion. Arslanian commented, “The crypto industry is not immune to the global headwinds and the number and value of crypto fundraising and M&A deals may be impacted in 2020.”

Top 5 Investor Deals in 2019 Compared to 2018Per the report, while 2018 saw traditional VCs andincubators among the top investors, 2019 saw a contrast with the majority of funding provided by crypto-focused incumbents like Coinbase and ConsenSys.Source: 2nd Global Crypto M&A and Fundraising Report

Crypto Companies Offer Complimentary Services to their Core business

Whilst 2018 saw a lot of crypto fundraising in blockchain infrastructure projects or M&A in the crypto mining space, 2019 saw a rise in investments in solutions for the crypto ecosystem like compliance and regulation; as well as M&A activity in the crypto service providers.

“We expect to see further consolidation in 2020 with some of the larger or more profitable players acquire firms that offer ancillary services to their current offering in areas like crypto media, research or even compliance,” said Arslanian.

PwC’s Global Crypto Team  

These latest insights come from PwC’s Global Crypto Team which has continued to lead research in the space since its inception. Henri Arslanian discussed the ever-growing role of his team in interview with Blockchain.News in January.

In the last 2 years, PwC has conducted over 320 crypto engagements globally, spanning across 15 different countries. “I think it’s very exciting to see how PwC is getting involved in the crypto ecosystem,” said Arslanian. “Our purpose is to build trust in society and solve important problems and there is a big need for that in the crypto and blockchain ecosystem. We set up this PwC crypto team almost three years ago as the crypto ecosystem was growing, to support crypto firms not only on areas like strategy or fundraising but also on day-to-day functions such as crypto accounting, tax or KYC/AML reviews.” Arslanian believes that firms like PwC are essential for the ecosystem to “go from 1.0 to 2.0,” and “that PwC has a big role to play.”  

FTX.US Exchange Acquires Regulated Derivatives Provider LedgerX

FTX.US, the United States subsidiary of FTX Derivatives Exchange, has announced the acquisition of LedgerX- a Commodity Futures Trading Commission (CFTC) licensed derivatives and options service provider.

As contained in the official announcement, the financial commitment of the deal remains undisclosed, and it is pending the satisfaction of customary closing conditions.

As a major player in the global cryptocurrency derivatives market, FTX exchange as a brand has grown its numbers, with a notable average daily trading volume of over $18 billion. Under the leadership of CEO Sam Bankman Fried, the exchange pulled over $900 million funding from investors, a capital boost that was available to push forth the company’s expansion and M&A activities.

As a regulated Designated Contract Market (DCM), Swap Execution Facility (SEF), and Derivatives Clearing Organization (DCO), the acquisition of LedgerX will let the companies build on this regulatory backing to expand its offerings to both retail and institutional investors alike. While harnessing the strength of its current customer base, the FTX brand influence is billed to enable the startup to increase its scope in the competitive industry.

Zach Dexter, CEO and Co-Founder of LedgerX, said:

“US crypto derivatives is an incredibly underserved market, and it took time and resources for us to become a regulated entity under the existing frameworks. FTX.US has taken the view, which we share, that US regulators are ready and willing to partner on innovative products, and it’s the responsibility of the industry as a whole to step up and work with agencies like the CFTC,”

Most cryptocurrency firms have found maintaining a positive business environment in the United States difficult over time. With regulators like the CFTC and its regulatory demands, many firms have been caught up in the commission’s bad books.

According to an earlier report by Blockchain.news, the BitMex derivatives exchange recently agreed to a $100 million settlement to the CFTC alongside the Financial Crimes Enforcement Network (FinCEN) for allegations bordering illegal business operations.

Known for its strategic acquisitions, assuming ownership of LedgerX will give the FTX brand a free ride to operate in the US without fears of a clampdown.

FTX Completes $420M Series B-1 Funding Round at $25B Valuation

FTX Derivatives Exchange has completed a $420.69 million Series B-1 funding with participation from top investors.

As announced by the firm, these investors include the Ontario Teachers’ Pension Plan Board, via its Teachers’ Innovation Platform, Temasek, Sequoia Capital, Sea Capital, IVP, ICONIQ Growth, Tiger Global, Ribbit Capital, Lightspeed Venture Partners, and funds and accounts managed by BlackRock.

The funding round came just after the company raised $1 billion back in July 2021. Following this latest funding round, the Bahamas-based outfit has increased its valuation to $25 billion, further extending its position as a unicorn in the digital currency ecosystem. The company said it is going to deploy the new funds in expanding its product offerings and pushing forth into new markets globally. Ramnik Arora, Head of Product at FTX, said:

“The additional capital and group of investors will let us provide the experience our users deserve and address other adjacent market opportunities including equities, prediction markets, NFTs, and videogame partnerships. We expect to make strategic investments designed to grow the business and expand our regulatory coverage,”

While FTX has also had to adjust its operations in line with regulatory pressures globally, the company has inked several milestones that have positioned it on its next growth phase. Since its last funding round, the Sam Bankman-Fried led organization has established its headquarters in the Bahamas while also securing licenses under new regulatory frameworks in both the Bahamas and Gibraltar.

The firm is also strategic in its product offerings as it has floated an NFT marketplace, a growing trend amongst major digital currency exchanges today. Known for its Merger & Acquisition acquisitions, the company acquired Blockfolio through a record-breaking $150 million deal at the time, and its US affiliate, FTX.US, also acquired CFTC regulated clearinghouse, LedgerX.

While the company did not declare any plans to make any acquisition with the latest capital injection, doing so will not be out of place in its push to expand its reach in the industry.

Binance Exchange Looks to Acquire Outstanding Shares in Swipe

Binance Exchange, the world’s biggest trading platform by volume, is ending its year in grand style, with a recent announcement that it is set to acquire the outstanding shares in Swipe, a Visa card issuing platform.

Per the announcement, Binance currently works with Swipe, who is the exchange’s technology partner when it comes to issuing function crypto-cards powered by payment giant Visa Inc. The Binance-Swipe relationship was cemented back in July last year when the trading platform “acquired a majority stake in Swipe with the goal to further mainstream adoption of cryptocurrencies by bridging the gap between fiat and digital assets, notably payments and purchases in cryptocurrencies through traditional financial systems.”

The duo’s relationship has been coloured by strict adherence to regulations as both works with “regulated and licensed entities to issue Visa cards, with Swipe acting as Binance’s card program manager and technology platform. Swipe also works with strategic partners to issue cards in permitted regions and markets.”

Binance Chief Executive Officer, Changpeng Zhao, popularly known as ‘CZ’, has often expressed that the exchange is a very profitable platform. This has been highly showcased in the series of strategic acquisitions that have been made in the past years. From the acquisition of Trust Wallet to CoinMarketCap, Binance ranks as one of the trading platforms that has made the most strategic and expensive acquisitions to date.

The exchange did not reveal the monetary terms of the remaining shares it hopes to acquire. However, it noted that when the acquisition is completed, Swipe CEO Joselito Lizarondo will step down and leave Binance.

Acquisitions are becoming a game in the digital trading platform as the bigger players look for promising firms that can help bolster their growth tracks. As reported by Blockchain.News, FTX Derivatives exchange also made one of the most expensive acquisitions in crypto history when it purchased Blockfolio for $150 million back in 2020.

Crypto Sector M&A Saw Almost 5000% Jump in 2021: PwC

The cryptocurrency industry saw a 4,864% jump in the value of mergers and acquisitions in 2021, Bloomberg reported citing a report by PricewaterhouseCoopers (PwC).

The report stated that the deals were partially driven by special-purpose acquisition company (SPAC) deals and the average deal size touched $179.7 million from $52.7 million. Also, crypto fundraising deal value witnessed a rise of 645%.

Among all investors, the report added that the top notable five investors by deal count were AU21, Genesis Block Ventures, Genblock Capital, Coinbase Ventures, and Moonwhale.

Henri Arslanian, PwC crypto leader, noted that currently there are no signs of crypto fundraising slowing down and some valuations have hit levels “that are often difficult to justify.”

In an October 2021 report, Bloomberg Law stated that the 2021 mergers & acquisitions and investment data showed a surge in deals involving entities with a nexus to crypto.

The report added that the surge reflects both the record levels of deal activity in 2021 and the bigger trend of a growing number of businesses taking an interest in cryptocurrencies and crypto-assets.

It went to elaborate that year to date, 577 deals involving at least one party with “crypto” included in its entity description had announced and closed or were currently pending – the highest total for such deals since they began to show up at a noticeable level around 2017.

Last year, $12.6 billion crypto deal volumes were involved in technology sector targets, and $7.6 billion were involved in financial sector targets. While in 2020, crypto companies inked almost $700 million in mergers and acquisitions across 83 transactions.

Fireblocks Acquires Stablecoin Payments Startup- First Digital

Fireblocks, a digital asset custody, transfer and settlement platform, has announced its acquisition of First Digital, which is a stablecoin, and digital asset payments technology platform. The latest figure showed that the acquisition was worth $100 million.

As the company unveiled, the acquisition will strengthen the Fireblocks’ payment offering by granting access to all of its Payment Service Providers (PSPs) in its network to accept and conduct their businesses through digital currencies. The acquisition will help all the PSPs within the Fireblock ecosystem in response to the surging demand amongst retail investors for crypto-related payments.

“We’re thrilled to welcome First Digital to the Fireblocks family as we accelerate our expansion plans to help every business become a crypto business. We’re pushing ‘fast forward’ to give PSPs the suite of tools they need to begin accepting crypto payments,” said Michael Shaulov, CEO and Co-Founder.

Fireblocks is currently valued at $8 billion following its $500 million funding round in January. Its deep liquidity arguably paved the way for this acquisition. The deep capital has also positioned the Fireblocks startup as the highest-valued digital asset infrastructure provider globally. This designation will bolster its plans to champion the emergence of a new digital payments enterprise.

Following the acquisition, the First Digital team will join the Fireblocks engineering team, adding their knowledge and expertise in the payments space to the latter firm’s growing tech stack. Ran Goldi, the Chief Executive Officer, will also assume a new role as the Vice President of Payments at Fireblocks.

Mergers and Acquisitions (M&A) are becoming a very prominent trend in the digital currency ecosystem today. To maintain a balanced stance in being prepared for the onboarding of the following 1 billion users that will enter the digital currency ecosystem, firms with adequate backing from Venture Capital (VC) firms like FTX Derivatives Exchange have been making several strategic acquisitions last year.

Coinbase Reportedly to Acquire Mercado Bitcoin Owner 2TM

America’s largest trading platform, Coinbase Global Inc, is reportedly on track to acquire 2TM, the Brazilian startup that owns the Mercado Bitcoin cryptocurrency exchange.

As reported by the Estadão newspaper, the American cryptocurrency trading firm has been in talks with 2TM since last year, despite citing no sources, claims a deal is on track to be inked by the end of April.

Mercado Bitcoin has been on a massive growth trajectory with the exchange hitting a 3.2 million milestone in the past year. While the platform added as much as 1.1 million in 2021 alone and the platform’s transaction volume topped $7.1 billion.

Latin America is growing to become a major region of interest amongst prominent trading platforms as there has been a steady growth of digital currency users in the region. Should the acquisition move be confirmed, it will lend credence to Coinbase’s expansion strategy as Mercado Bitcoin will be a very good pathway to make its presence felt in the Latin American world.

2TM is valued at $2.1 billion following $200 million it raised in a Series B funding round and $50 million in a second closing of the funding in last November. The startup also received a liquidity injection from Mercado Libre earlier in January alongside Paxos as reported by Blockchain.News.

Earlier this year, the 2TM Group also acquired a controlling stake in Lisbon-based crypto exchange CriptoLoja, an acquisition that expanded its ecosystem remarkably. The proposed acquisition from Coinbase will also likely extend its influence to the Portuguese markets through CriptoLoja.

Mergers and Acquisitions (M&A) is becoming a prominent event in the digital currency ecosystem and are even more common amongst trading platforms. Previously, Blockchain.News reported global digital assets platform, Amber Group, has taken up ownership of Japan-based cryptocurrency trading platform, DeCurret in a concluded transaction with no monetary terms declared back in February.

BitMEX’s Bid Fails to Acquire 268-Year Old German Bank

Crypto exchange BitMEX’s plan to acquire Bankhaus von der Heydt, one of oldest banks in Germany, has failed to go through.

Bankhaus von der Heydt was established in 1754. A German media outlet announced on Thursday that the mutual agreement that the two parties about the acquisition have been called off. BitMEX spokesperson disclosed in a statement:

“After further discussions between BXM Operations AG and the owner of Bankhaus von der Heydt, the two parties have mutually and amicably decided to discontinue the proposed acquisition. We look forward to sharing details of our future plans in due course,”

In January, BitMEX announced plans to buy the 268-year-old private bank based in Germany. However, the sale was subject to the approval of the German financial regulator, the Federal Financial Supervisory Authority (BaFin).

Although the report did not mention the reason for the cancellation of the deal, Alexander Höptner, the German CEO of BitMEX, confirmed that both parties discontinued the mutually agreed plan.

Through the sale, BitMEX would have acquired a banking license in Germany, where regulated entities are permitted to custody of digital assets, and offered a crypto business unit for the Munich-based bank. BitMEX wanted to develop a strong presence in the European market by establishing a one-stop-shop for cryptocurrency products in Germany, Switzerland, and Austria. The exchange also hoped that the acquisition would have helped it rank among the best crypto trading platforms of the top ten cryptocurrency exchanges by volume.

BaFin’s involvement is suspected resulting in the cancellation. BaFin approval was known as a difficult process to win, especially after a series of recent fintech scandals in Germany, including those associated with Wirecard and Greensill Bank.

BitMEX is expected to complete the sale in the middle of this year.

Expanding Customer Service Capabilities

In late 2020, BitMEX faced a lot of challenges when the U.S. Justice Department and the Commodities Futures Trade Commission (“CFTC”) slammed the exchange and its principals with a coordinated criminal and civil prosecution.

In August last year, BitMEX agreed to pay $100 million to resolve the criminal charges. Since then, the platform remained committed to continuing its growth and opening a new chapter in its development. In the recent past, the exchange sought additional licenses in a number of jurisdictions and broadened its offer with five new business segments, including spot, custody, and brokerage capabilities, as well as information products, and an academy that enables users to learn about crypto trading.

Bolt to Acquire Wyre, Speeding up Mainstream Crypto Adoption

Bolt, a leading US checkout and shopper network firm, announced Thursday its definitive agreement to acquire Wyre Inc., a cryptocurrency infrastructure provider based in San Francisco.

Bolt disclosed that it expects to complete the acquisition before the end of 2022, and the process is subject to multiple customary closing conditions and regulatory approvals.

The move by Bolt comes amid rising demand for buying goods and services with crypto coins and the opportunity of Web3.

Bolt will develop commerce solutions for mainstream, secure crypto usage for millions of shoppers, retailers, and developers by integrating its platform with Wyre.

Together, the firms will decentralize commerce by uniting their technologies to evolve and simplify digital shopping. Wyre’s APIs enable secure and straightforward cryptocurrency to fiat experiences that reduce the barrier to entry that developers and partners face.

The acquisition is set to bring the power of Bolt’s CheckoutOS—one-click checkout, authentication, payments, and fraud protection—to the crypto ecosystem. Bolt will integrate its platform with Wyre’s innovative cryptocurrency infrastructure to securely exchange cryptocurrency to fiat —which enables retailers to accept crypto as a payment method, with the security and ease of conversion to traditional currencies.

Since the use and popularity of cryptocurrencies are rising, consumers are seeking to use them in their daily transactions. Wyre and Bolt will help millions of people adopt cryptocurrencies through such acquisition by providing an accessible and effective payments platform on a global multi-million-person shopper network.

Maju Kuruvilla, CEO of Bolt, talked about the development and said, “our merchant and retail partners expect us always to be innovating on their behalf—because their customers demand it. That’s why it’s such a thrill to announce this acquisition, which is yet another step that Bolt has taken to improve the buying experience. This acquisition will pave the way for seamless, secure crypto transactions and NFT enablement for our retailers. Consumers and retailers will benefit from a friction-free buying experience that natively supports crypto and NFT. We’re also proud to bring Wyre’s unparalleled team and its advanced crypto stack into the Bolt ecosystem, and we’re excited about our joint mission of bringing crypto mainstream.”

Democratizing Commerce

In November last year, Bolt acquired Tipser, a Swedish-based tech firm enabling commerce across digital touchpoints, to advance its shared vision of enabling shoppers to check out immediately and safely at any point of discovery.

Bolt leveraged Tipser’s headless implementation capabilities, touchless merchant integrations, and turn-key publisher marketplaces to enhance its “Remote Checkout” solution.

In January this year, Bolt raised $355 million in Series E funding (led by BlackRock and other participants) to drive the next phase of growth in the commerce race.

Founded in 2014 and headquartered in San Francisco, Bolt’s online payment and checkout platform are designed for e-commerce retailers, including both enterprise businesses and small and medium-sized businesses, to reduce the number of abandoned carts and increase conversion rates through its fast, low-friction checkout process.

Bolt strengthens retailers’ relationships with their customers by unlocking secure, logged-in, lightning-fast checkouts. Thousands of retailers leverage Bolt to provide their shoppers with the seamless checkout experiences they expect.

FTX Denies Making Internal Deliberations on How to Acquire Robinhood

Sam Bankman-Fried’s FTX Derivatives Exchange is reportedly making internal deliberations on how to acquire Nasdaq-listed brokerage firm Robinhood Markets Inc. However, FTX denied its claims.

Bloomberg reported earlier, citing people familiar with the deliberations, that the crypto behemoth has not made a formal offer to acquire Robinhood at this time, and one of the sources says the final decision may change in the coming days.

“We are excited about Robinhood’s business prospects and potential ways we could partner with them,” Bankman-Fried said Monday in an emailed statement, according to Bloomberg, “that being said, there are no active M&A conversations with Robinhood.”

Robinhood’s stock has once surged by 15% after Bloomberg reported that FTX was looking to acquire the popular trading app, Its share price closed at $9.12, was up 14%.

Beyond the world of cryptocurrencies, a lot of tech startups across the globe have been experiencing a massive devaluation owing to the gloomy global economy. While the world is yet to recover from the pangs of the Coronavirus pandemic fully, the Russian invasion of Ukraine further aggravated the economic turmoil.

Amidst these, Robinhood which attained its fame during the active COVID-19 years has seen as much as three-quarters of its share price erased in the past year as brokerages particularly took a hit. While Robinhood has not declared it is struggling to keep its business running, there is evidence pointing to the fast declining rate of transactions and revenue across the board.

The first impression that suggested FTX might be interested in Robinhood came when Sam Bankman-Fried’s wholly controlled entity, Emergent Fidelity Technologies acquired a 7.6% stake in Robinhood last month, a move that sent the shares of the company soaring at the time.

FTX and its American subsidiary FTX US has been very active on the Merger & Acquisition (M&A) scene in the past year. Most of the company’s acquisitions have been centred on outfits that can further help advance its brand name as a leader in the trading and financial services sector. The most recent acquisitions include LedgerX and Embed, a regulated clearing startup.

Should the acquisition of Robinhood become a thing, the FTX exchange would have doubled its position in both the cryptocurrency ecosystem as well as the mainstream stock markets.