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Goldman Sachs Might Soon Advise FTX In Regard To Its Forthcoming IPO

FTX is on the brink of spilling over into the investing mainstream with an initial public offering (IPO).  The shift of FTX from the private realm to the public realm is important in and of itself yet the bank it is partnering with to facilitate the transition is also notable.  

Goldman Sachs, one of the most revered names in the financial industry, is poised to advise FTX on its IPO as well as regulatory discussions.  It appears as though it is not a matter of if but when FTX will go public.  The availability of FTX shares is fantastic news for cryptocurrency investors.  Let’s take a closer look at the potential role of Goldman Sachs in FTX’s transition to becoming a publicly traded company.

A Marriage Made In Corporate Heaven?

The potential partnership between FTX and Goldman Sachs has the potential to prove mutually beneficial to both companies.  FTX is held in high regard by crypto enthusiasts and those in the overarching financial space as it is one of the world’s largest bitcoin exchanges.  According to a Financial Times report released earlier this week, Goldman Sachs is proactively attempting to partner with FTX to help the company make a seamless transition to becoming a publicly owned company.

Details Of The Report

The Financial Times reports the Chief Executive Officer of Goldman Sachs, David Solomon, had a lengthy meeting with Sam Bankman-Fried, the founder of FTX earlier last month.  The closed-door session took place at some point in March in an effort to lay the groundwork for a that would facilitate a timely transition of FTX from a private company into a publicly traded company.  The partnership would also help mitigate regulatory hurdles.

It has been reported that the two powerbrokers discussed strategies to minimize regulatory compliance challenges in the United states.  To be more specific, the executives discussed potential hurdles in the context of Commodity Futures Trading Commission (CFTC), potential financing rounds and the prospect of FTX going public with an IPO.  If Goldman Sachs’ brass has its way, it will perform in an advisory capacity for FTX all the way up until the company goes public and possibly beyond.

Crunching The FTX Numbers

FTX has a valuation slightly in excess of $32 billion after three investment rounds.  Those rounds raised hundreds of millions of dollars.  The round that ended in January raised a whopping $400 million.  However, it must be noted this tally is the lowest of the company’s three rounds of funding.  If FTX partners with Goldman Sachs, Goldman will likely play a pivotal role in market making, meaning establishing the price and availability of its publicly traded shares to facilitate fairness and liquidity.  

Wall Street Is Embracing The Crypto Movement

The potential pairing of Goldman Sachs with FTX makes it clear that the titans of Wall Street are clearly willing to back cryptocurrency firms.  The question is whether FTX’s leadership will be open to the idea of solely relying on Goldman Sachs for guidance with its public listing and regulatory challenges.  

Reports have indicated that Bankman-Fried is looking beyond Goldman Sachs for guidance in terms of funding and transitioning FTX into a publicly owned company.  It must be noted Goldman Sachs was originally anti-crypto.  The heads of Goldman originally bashed bitcoin and other cryptos yet have since reversed course.  Goldman spearheaded the IPO of the Coinbase (COIN) crypto exchange earlier last year.

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