According to external documents, the crypto craze last year helped the FTX crypto exchange generate revenue of about a billion dollars.
During this time, the crypto exchange also expanded its global footprint by making a flurry of acquisitions.
The company’s finances
The audited financials offered a rare glimpse into the finances of the privately held company. The crypto exchange proved to be quite profitable and quickly expanded across the globe, due to breakneck growth.
There was a more than 1,000% increase in the revenue of the FTX crypto exchange, as it rose to $1.02 billion in 2021 from $89 million.
Similar to a number of startups, the profitability of the crypto exchange depends on how it is measured. The operating income increased from $14 million to a whopping $272 million a year later.
Last year, the net income for the FTX crypto exchange stood at $388 million, which had been $17 million a year before that.
The first quarter of this year saw the company generate a revenue of about $270 million. It was also on the track of recording revenues of about $1.1 billion for the full year.
However, it remains unclear as to how the FTX crypto exchange fared in the second quarter, as crypto prices tumbled in what is being regarded as the ‘Crypto Winter’ in the market.
The crypto bull market had been favorable to almost all businesses operating in the sector. One of the top competitors of FTX is none other than Coinbase.
The publicly traded exchange also saw a cash boom during the bull market, as its revenue was around $7.4 billion and net income in the previous year was $3.6 billion.
However, revenue stood at $808.3 million in the second quarter of 2022, which is a loss of 64% from the same quarter a year earlier.
In addition, there was also a surprise net loss in the quarter of about $1.1 billion, while the net income last year had been $1.59 billion. This was due to the decline in trading volumes.
Sam Bankman-Fried, the former Wall Street trader, had launched the crypto exchange three years ago. The 30-year old chief executive has recently become the crypto industry’s lender at the eleventh hour.
With liquidity in the crypto market drying up, he has been backstopping companies. Not only has his companies offered hundreds of millions of dollars in loans, but they are also looking to acquire assets.
FTX signed a deal in July in which it added the option of acquiring crypto lending platform BlockFi. It is also discussing the acquisition of Bithumb, the Korean crypto exchange.
In August, FTX had also made an offer to buy Voyager Digital, but the company had turned it down claiming it to be a lowball bid.
At the end of 2021, the cash reserves of FTX stood at around $2.5 billion and profit margins had been around 27%.
The last funding round had been in January when $400 million had been raised and its valuation was $32 billion.