Largest Mergers and Acquisitions in the History of Crypto
A few days ago, Binance confirmed the acquisition of the most referenced crypto pricing website in the world, CoinMarketCap. The cash-and-stock deal is rumored to be worth as much as $400 million, ranking it as one of the largest acquisitions in the crypto space.
In this article, we review other multi-million dollar mergers and acquisitions that the crypto industry has seen in the past few years, all worth over $100 million. After, we try to draw comparisons between this deal and the rest.
Circle acquires Poloniex for $400 M — February 2018
Goldman Sachs backed payments company Circle acquired US crypto exchange Poloniex for roughly $400 million in February 2018. At the time, Poloniex was the 14th largest crypto exchange in the world with a daily trade volume of $142 million.
The acquisition was expected to put Circle in direct competition with Coinbase which had essentially monopolized crypto trading in the US.
Barely 18 months later, however, Circle announced that the Poloniex team and leadership would be spinning out from Circle into a new independent international company, Polo Digital Assets, Ltd. backed by an Asian investment group.
NXMH acquires 80% stake in Bitstamp for $400 M — October 2018
In October 2018, Bitstamp selected NXMH as a buyer, after courting suitors for some time. The rumored price for the all-cash deal was roughly $400 million for 80% of the Luxembourg-based exchange.
NXMH is the European subsidiary of South Korea-based NXC, which also owns South Korean cryptocurrency exchange Korbit. The deal specified that Bitstamp and Korbit would operate independently.
Bk Global Consortium acquires 38% stake in Bithumb for $354 M — October 2018
In October 2018, the largest cryptocurrency exchange in South Korea by trading volume, Bithumb, sold over 38 percent of its total ownership to a Singapore-based blockchain consortium for approximately 400 billion won or $354 million. BTC Holdings Company — Bithumb’s erstwhile majority shareholder with a 76% stake in the company — sold 50% of its total shares, and one additional share, to Bk Global Consortium, making it the largest shareholder of Bithumb.
The acquisition deal valued Bithumb at over $880 million.
Lightyear Corp acquires Chain Inc for $350 M — September 2018
In September 2018, Lightyear Corp., a company that is developing on the Stellar blockchain bought Chain Inc., a San Francisco blockchain startup. The two companies formed into a new firm called Interstellar, which intended to migrate Chain’s customer base and products onto Stellar’s global public ledger, creating a platform that would enable organizations to issue, exchange and manage assets. The price of the acquisition was not disclosed, but it was rumored that the figure in the all-cash deal was around $350 million.
TRON Foundation acquires BitTorrent for $125 M — July 2018
July 2018 saw the largest acquisition to date by an ICO funded team. BitTorrent, an early mover (and currently the largest player) in decentralized computing architecture to distribute and store data was sold for $125 million in cash to Justin Sun and his blockchain media startup TRON. The TRON and BitTorrent teams merged into one. At the time, Justin Sun, CEO of Tron celebrated the software as “the genesis of the decentralization movement”. BitTorrent later raised 7,200,000 USD from an IEO on Binance Exchange months after this acquisition in January 2019.
Coinbase acquires Earn.com for $120 M — April 2018
In April 2018, Coinbase announced its most significant piece of M&A to date after it acquired Earn.com (a platform that allowed senders to pay users in cryptocurrency to reply to emails and complete tasks) in a deal worth more than $120 million. Furthermore, Coinbase appointed Earn.com co-founder and CEO Balaji Srinivasan as its first CTO and absorbed the Earn.com team. A year after the acquisition, Coinbase closed down Earn.com to focus exclusively on Coinbase Earn.
Kraken acquires Crypto Facilities for $100M — February 2019
In February 2019, cryptocurrency exchange services provider Kraken officially acquired regulated futures trading startup Crypto Facilities in an undisclosed deal valued at at least $100 million. The acquisition aimed to enable Kraken customers to trade spot, as well as open positions offering exposure to the future price movements of cryptocurrencies, all through a unified trading interface.
Conclusion
Binance has certainly been busy with acquisitions lately with 9 in the past year alone and at least one more in store this year. For the CoinMarketCap deal, Binance claims that both companies would continue to work as individual entities. Given the record of previous acquisitions in the crypto space, is this achievable? Will it turn out to be a replica of Coinbase’s acquisition of Earn.com? Can CoinMarketCap remain autonomous with ranking and listing decisions? M&As are used as a strategy to address growth challenges. What contribution can CoinMarketcap make to Binance and vice versa? All these questions will be answered in due time.
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