FTX has decided to move its headquarters from Hong Kong to the Bahamas. Why? The Bahamas has a clear regulatory framework and the country is free of Covid-19 restrictions.
FTX moves to the Bahamas
Sam Bankman-Fried, CEO of FTX, announced on Twitter that the exchange is moving its headquarters from Hong Kong to the Bahamas.
Earlier this week, FTX had received several licenses for subsidiaries in Gibraltar and the Bahamas. It will operate under the banner of “FTX Digital Markets” in the latter country, where it is registered with the Bahamas Securities Commission. Sam Bankman-Fried explained that regulatory clarity in the country was the main reason for the move.
The announcement means that Mr. Bankman-Fried will likely spend a significant portion of his time in the Bahamas office and that key operations will be moved there over time. A paradise country that seems to suit the FTX teams:
On a more serious note, the decision to move the headquarters seems to have two reasons. The Chinese government continues to crack down on cryptocurrencies and FTX may face regulatory uncertainty in the future, despite the favorable environment in Hong Kong.
In addition, Sam Bankman-Fried expressed his frustrations with the Covid-19-related procedures in China and Hong Kong (3 weeks of quarantine). Thus, the CEO highlighted the easing of restrictions in the Bahamas.
A dazzling success in only 2 years
With more than a million users, FTX says its revenue has grown more than tenfold this year. Last year, the exchange made $85 million in net income and expects to make about $800 million by 2021.
On average, the company records a daily trading volume of about $20 billion in derivatives and $3 billion in the spot market.
Based on the data, FTX does most of its trading volume on derivatives trading, which does not make Hong Kong an ideal place for a trading base. In August, Binance was forced to stop allowing Hong Kong-based users to trade derivatives that include futures, options and perpetual contracts on its platform.
