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Crypto exchange Coinbase attempted to acquire FTX Europe twice since it filed for bankruptcy in November 2022, hoping to broaden its derivatives business overseas. The company, however, has decided not to go forward with the deal, Cointelegraph has learned. 

According to a report from Fortune, Coinbase explored acquiring FTX’s European arm on two occasions, in November 2022 — following its parent company’s dramatic debacle — and in September 2023. A spokesperson for Coinbase confirmed the report:

“We’re always evaluating opportunities to strategically expand our business and meet with many teams around the world.”

Along with Coinbase, parties interested in FTX Europe reportedly include exchange Crypto.com and crypto firm Trek Labs. According to Fortune, the sale deadline has been extended to Sept. 24. FTX spent nearly $400 million on the acquisition of its European branch.

FTX Europe operated its derivatives business under a Cyprus regulatory license. By the time of the group’s collapse, it was the only firm to offer some popular derivatives products, such as perpetual futures. Derivatives are financial instruments whose value is derived from an underlying asset, such as Bitcoin BTC $26,551. There are various types of derivatives, including options, futures and swaps. Investors use derivatives for hedging, leverage and to speculate on markets. It’s a popular investment strategy for traders and institutional investors.

The acquisition would potentially boost Coinbase’s fee revenue, as crypto derivatives trading is on the rise, despite the bear market. According to Coinbase’s latest quarterly earnings report, the exchange generated $707 million in revenue in the second quarter of 2023, with $327 million coming from spot trading — a $13% decline from the previous quarter.

Meanwhile, global derivatives volumes traded on centralized exchanges increased 13.7% in June to $2.13 trillion, according to CCData. Binance was the leading venue for derivatives crypto trading in the month, with volume topping $1.21 trillion in June, followed by OKX exchange with $416 billion, up 44.9% in activity. Bitcoin futures volume also spiked on the CME exchange, reaching $37.9 billion, a 28.6% increase in the month.

Coinbase has also moved into derivatives markets in the United States. In August, it obtained regulatory approval to offer investments in crypto futures to eligible customers in the country. 

The approval enabled Coinbase to introduce Bitcoin and Ether ETH $1,592 futures contracts through its Commodity Futures Trading Commission-regulated derivatives exchange, FairX. According to Coinbase’s announcement at the time, the global crypto derivatives market represents nearly 75% of crypto trading volume worldwide and is a “critical trader access point.”

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Gold prices ended the week little changed, rebounding from a one-week low, as markets continued their debate on whether the Federal Reserve’s final rate hike for the year would be in November or December.

“Weakening global growth prospects are (also) starting to attract some safe-haven flows towards bullion,” Ed Moya, analyst at online trading platform OANDA, said. “Gold has shown that the $1,900 level was a major line in the sand and now it appears to be poised to consolidate around the $1,950 level.”

Gold’s most-active futures contract on New York’s Comex, December, settled up $6, or 0.3%, at $1945.60 an ounce. For the week, it closed virtually flat, down 0.03%.

The spot price of gold was at $1,925.01 by 15:10 ET (19:10 GMT). Spot gold, determined by real-time trades in physical bullion and more closely followed than futures by some traders, was up $4.90, or 0.3%, on the day. For the week, it rose 0.1%.

“For gold to move back above the $2,000 level, investors will need to see major dollar weakness, which will be driven by evidence that the labor market is breaking,” Moya said.

Markets debating when next Fed hike will be

The Dollar Index hit six-month highs on Friday, limiting buying of dollar-denominated commodities by holders of other currencies. Offsetting some of the dollar’s charge was a decline in U.S. bonds, measured by the 10-year U.S. Treasury note, which hit its highest since 2007 before retreating.
Both yields and the dollar shot up this week after the Fed projected another quarter-percentage point rate increase by the year-end, despite leaving rates unchanged for September itself at a policy meeting on Wednesday.

“We are prepared to raise rates further, if appropriate," Fed Chairman Jerome Powell told a news conference on Wednesday. "The fact that we decided to maintain the policy rate at this meeting doesn't mean we have decided that we have or have not at this time reached that stance of monetary policy that we are seeking."

The Fed had raised interest rates 11 times between February 2022 and July 2023, adding a total of 5.25 percentage points to a prior base rate of just 0.25%. The central bank has forecast that U.S. rates will trend around 5.1% through 2024.

The Fed has two more policy meetings left for this year — in November and December. Markets are trying to guess which month the central bank would pick for what would be its last hike for 2023.

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In a recent in-depth interview Peter Schiff, a well-known economist and gold advocate, revealed mounting concerns regarding the stability of the U.S. dollar, saying there’s “going to be a massive crisis,” that will send “the economy into a tailspin.”

The interview, with David Rodriguez, saw Schiff address the growing debt of the U.S. government and its expanding annual deficits, and forecast a troubling future for its fiat currency as a result.

Schiff suggested investors should be escaping the U.S. dollar as there’s “gonna be a deluge before too long where it’s a rush to get out of the dollar.” The U.S. national debt has now ballooned to over $33 trillion, and to Schiff the repercurssions of this are soon going to be manifested as the interest on it becomes the leading government expenditure.

Schiff added that by net year “the interest on the debt is going to be the biggest expense the government has … Eventually, it will be the only expense we have. If this continues, there won’t be any money left over for anything but interest and, obviously, we can’t get to that point.”

It sent a message. ‘Get out of the dollar! Otherwise, you’re in a very vulnerable position because the US could punish you for using the dollar.’

Schiff suggested the dollar could collapse through a snowball effect, as interest rates have “helped prop up the dollar,” and as a result creditors aren’t rushing to drop the fiat currency, but could after its value drops significantly from current levels.

As CryptoGlobe reported, cryptocurrency markets face a seemingly more urgent tremor, as an  analytics firm has recently suggested that a potential $3 billion sell-off is looming, rooted in the potential liquidations of FTX’s massive cryptocurrency stack to repay creditors.

If such a crisis does come, some analysts have suggested gold could be a safe haven. Earlier this month Carley Garner, co-founder of brokerage firm DeCarley Trading, said that gold has been holding critical support levels and is now in a position to move into new all-time highs, at a time in which the U.S. dollar is losing momentum.

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Benzinga - Commodity Futures Trading Commission Commissioner (CFTC) Commissioner Christy Goldsmith Romero has suggested that regulators need to update their protection measures with technological advances. She goes on to add that the inability to do the same is likely to impact the crypto investors.

Amid all the uncertainties surrounding the crypto sector, Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) prices are likely to close Tuesday in the green.

Also Read: SEC Chair Gensler Calls Crypto A 'Field Rife With Fraud, Abuse And Misconduct'

Speaking at the North American Securities Administrators Association’s annual meeting in San Diego, California, Romero said that as regulators make policy decisions on nex-gen technology, it is most important to understand the technology and its impact on the financial sector.

Know more about the latest trends, regulations & AI. Meet and engage with transformative Digital Asset and Crypto business leaders and investors at Benzinga's exclusive event - Future of Digital Assets. Tickets are flying- get yours!

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For the CFTC’s Technology Advisory Committee (TAC), Romero has picked technology experts in fintech, responsible artificial intelligence, cryptocurrency, blockchain, and cybersecurity. CFTC experts are being asked to identify ways to install Know Your Customer (KYC) and Anti-Money Laundering (AML) processes into decentralized finance and crypto investment avenues.

As reported by the Coin Telegraph, Romero added, “Tracing funds, tracing crypto, using the blockchain, using link analysis, using social media, and data analytic tools should all be in a regulators’ tool kit.”

Romero also put forward the idea of forming a National Financial Fraud Registry, a centralized record of all crimes and fines related to financial fraud, something she first suggested in December 2019. Such a platform could help investors avoid financial fraud and raise safety levels.

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The U.S. dollar steadied near a six-month peak in early European trade Thursday, boosted by signs of a resilient U.S. economy even as the global outlook weakened. 

At 03:00 ET (07:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher to 104.897, having earlier reached just short of 105, its highest level since mid-March. 

U.S. economy shows resilience

Data released Wednesday showed that U.S. service sector activity grew more than expected in August, with a gauge of prices in the sector also rising further.

The readings fueled concerns that inflation will remain sticky in the near-term, eliciting a continued hawkish outlook from the Federal Reserve.

Unemployment data later in the session is expected to show that the U.S. labor market remains healthy, with initial jobless claims expected to rise slightly to 235,000 from 228,000 the prior week.

Also of interest Thursday will be the plethora of Fed officials due to speak later at a fintech conference hosted by the Philly Fed, before they enter the blackout period ahead of their meeting later this month.

Weak German industrial production weighs on euro

Elsewhere, the economic news looks a lot less impressive.

EUR/USD fell 0.1% to 1.0719, near its lowest level since June, after German industrial production fell 0.8% in July compared to the previous month, more than the expected 0.5% drop, underlining the challenges faced by manufacturing in Europe's largest economy.

European Central Bank policymakers were keen to warn investors on Wednesday that the central bank could still hike interest rates again, in what would be its 10th consecutive rise, when they meet next week.

However, with economic activity deteriorating across the region, expectations are rising that the Governing Council will choose to pause, even if it keeps the door open to further moves.

British house prices slump

GBP/USD fell 0.1% to 1.2502, not far away from the three-month low seen in the previous session, after data from Halifax, the U.K.’s largest lender, showed that U.K. house prices fell 4.6% on an annual basis in August.

This suggests that prices are falling at the fastest rate since the aftermath of the financial crisis, and things are likely to get worse with Halifax expecting further downward prices on property prices.

Weak trade data weighs on Chinese yuan

USD/CNY rose 0.1% to 7.3254, with the yuan falling to its weakest level since November 2022, after weak economic data from China also dented sentiment towards Asian markets, with both imports and exports in the country continuing to decline through August, albeit at a slower-than-expected rate.

USD/JPY fell 0.1% to 147.50, with the yen near a 10-month low, weighed by two Bank of Japan officials reiterating that the bank is likely to maintain its ultra-dovish policy in the near-term.