Coinbase Acquires Futures Exchange FairX
Coinbase Acquires Futures Exchange FairX

On January 12th, 2022, Coinbase announced the acquisition of FairX, a
Commodities Futures Trading Commission (CFTC) registered Designated
Contract Market (DCM) offering futures. Architect Partners served as the
financial advisor for FairX.

FairX operates a regulated futures exchange for retail investors. The
company offers 1) straightforward and retail user-friendly products 2)
discounted fees compared to a traditional futures exchange, 3) retailfocused products requiring less capital, and 4) committed market makers
enabling strong liquidity. FairX launched in June 2021 and currently offers
futures on two index products in two sizes: the Bloomberg US Large Cap
Index Futures and SuperTech Index Futures, as well as Micro Crude Oil
Since launch, FairX had an average daily volume across its products of about
9,000 contracts. Based in Chicago, FairX was founded in 2019 by Neal Brady,
CEO and co-founder of ErisX, acquired by CBOE (M&A Alert) last year,
Harsha Bhat, CTO and previous SVP/CTO of State Street’s GlobalLink trading
platforms, and Chairman Clifford Lewis. FairX raised over $27 million in three
funding rounds. Notable investors include Hyde Park Venture Partners, TD
Ameritrade, XTX Ventures, Battery Ventures, Limerick Hill, and Virtu

We are seeing a trend of crypto-native firms acquiring regulated entities to
expand their offerings of sophisticated financial products. Both retail and
institutional clients demand regulatorily compliant solutions, but current
regulation is often disjointed as crypto can be an awkward fit for existing
regulatory structures. There has been much discussion regarding a
straightforward set of rules for crypto, most likely tweaks to existing
frameworks. Buying regulated entities therefore provides regulatory
“insurance” for crypto firms while future regulations are being
implemented. Coinbase has done this in the past, via purchases of three
SEC-licensed firms. FTX’s October 2021 acquisition of LedgerX is another
example, absorbing LedgerX’s 3 CFTC licenses of DCM, Swap Execution
Facility, and Derivatives Clearing Organization. We expect this approach to
accelerate in the next twelve months as crypto-native firms continue to
integrate with traditional financial services.

There are several drivers for this acquisition. First, FairX provides Coinbase
with a crypto derivatives regulatory framework for both retail and
institutional investors in the US. FairX is a CFTC registered DCM, and will be
Coinbase’s first entity fully regulated by CFTC (Coinbase applied for an
Futures Commission Merchant license in September of 2021, but has not yet
been approved). Second, it allows simplified access to futures to their
sizable retail client base. Lastly, it furthers Coinbase’s institutional product
line. Institutions need to hedge positions and hedging Bitcoin or Ethereum
is done under the commodity framework in the US.


Kasikornbank Acquires Satang Crypto Exchange

Elliot Chun
November 8, 2023

Thailand’s Kasikornbank Acquires 97% of Satang Crypto Exchange For $102.8M

Transaction Overview

On October 29, 2023, Thailand’s Kasikorn Bank announced it acquired 97% of the shares of the cryptocurrency trading platform Satang Corporation for $102.8M (3.705B Thai Baht). 


Target: Satang Crypto Exchange

Satang Crypto Exchange offers trading for 45 unique cryptocurrencies, HSM-secured custody, staking, and a digital payment platform for utilities and public transportation in Thailand. 


Satang holds a Thailand Digital Asset Business License and according to the 2022 trading volume is one of the four largest crypto exchanges in Thailand. In CY2022, Satang’s revenues were $1.7M, and has not disclosed any outside capital raised. Satang’s closest competitors include Bitkub, Bybit, OKX, eToro, Zipmex, and Bitazza. 


The company was founded in 2017 in Thailand by Poramin Insom, CEO, and has around 50 employees. 


Buyer: Kasikornbank

Kasikorn Bank is the 2nd largest bank in Thailand with roughly 16% market share as of June 2023. Kasikorn focuses primarily on individuals, with services including retail banking, corporate banking, investment banking, and digital banking. 


Kasikorn has been interested in developing its digital asset business for the past two years and set a goal to capture 20% of the cryptocurrency market share in Thailand by the year 2024. To achieve this goal, Kasikorn Bank has been opening new digital asset subsidiaries. In March 2022, Kasikorn registered Orbix Custodian as its new crypto custody unit. Since then, it has opened Orbix Invest as fund management and Orbix Technology to develop blockchain infrastructure. 


In September, Kasikorn announced its $100M Web3, FinTech, and AI fund called Kasikorn X Venture Capital (KXVC).


Transaction Parameters

Kasikornbank acquired 97% of the shares in Satang for $102.8M with the other 3% of shares still held by Binance. Satang will be rebranded as Orbix. Orbix will include Kasikornbank’s three crypto divisions, Orbix Custodian, Orbix Invest, and Orbix Technology.


Comparable M&A transactions in the crypto exchange industry include Liquid Group | FTX (ND), Bitex | Huobi (ND), Amber Group | DeCurret, Siam Commercial Bank | Bitkub ($1.05B), DHS Consulting | Allentro ($575M), Exegy | Vela, and SBI Financial Services | B2C2


Strategic Rationale

Kasikornbank made a clear promise to investors that they would capture 20% of the crypto market share in Thailand by 2024. The simplest and most effective way to accomplish this is by acquiring a leading crypto exchange as they have done here. Kasikorn now owns a leading local exchange with requisite licenses demonstrating their strong digital asset strategy in full action. 


Architect Partners’ Observations

Our thesis is simple: the crypto industry will see an increase in bridge M&A transactions (non-crypto companies acquiring a crypto company). 


Crypto assets continue their transition from an emerging asset class to a global asset class. Servicing crypto assets, and their owners, has a different set of requirements compared to other traditional asset classes. 


Every company in a traditional industry, especially financial services, will have or has already undergone an internal assessment of how they plan to adopt crypto assets. This assessment inevitably includes a Buy vs. Build. vs. Partner vs. Invest.


Another theme we see here is regulation clarity driving action. Thailand has specific regulations around cryptocurrency. This gives comfort to TradeFi institutions to become involved since the rules are (relatively) clear.  


Exchanges have been the primary onramp into the industry and have the largest number of retail crypto holders. Acquiring an exchange gives immediate scale and can deepen retail relationships into the much-desired “cross-sell” with its in-house products. 


Geographically, Thailand ranks in Chainalysis’ Top 10 Countries Adopting Crypto Report. In fact, Southeast Asia has 4 countries in the top 10 with Asia representing 7 of the top 11. These data points support the narrative that crypto is a global asset class with Asia playing a leading role. We expect Bridge M&A activity in the Asia region to increase in 2024 as Financial Services companies execute their “buy” strategies.


The valuation of the deal is a bit of a head-scratcher, and we believe the stated price includes significant, undisclosed earn-out based on performance to achieve it. We will update this alert once we uncover more details on this transaction. 



PitchBook, Satang Financial Statements, Satang Website