Alameda Research, the operator of the crypto derivatives platform FTX, has made a seven-figure investment in Folkvang, a digital asset quant trading company.
Reported by Coindesk on Tuesday, the investment is odd as Hong Kong-based Folkvang is one of the direct market competition of Alameda Research. The exact amount of the investment is not public yet as the company only revealed that the amount is in the seven-figure range.
“It is kind of a strange situation, for sure,” Mike van Rossum, founder and CEO of Folkvang, told the publication.
Apart from its algorithm-based trading business, Alameda runs an over-the-counter (OTC) desk and FTX Exchange . However, the magnitude of Almada’s quant trading business puts it in direct competition with Folkvang, which also offers market Liquidity services.
Notably, Folkvang even placed restrictions on Almada to prevent it from gaining any unfair market advantage.
The growing demand for crypto derivatives
Though van Rossum is an experienced crypto algorithmic trader having entered the space in 2013, he incorporated Folkvang last January. In the short span, the firm has a presence on BitMEX and even FTX, along with the derivatives platform of Binance, OKEx, and Huobi.
He also revealed that Alameda took note of Folkvang's rapid capture of the crypto trading market with millions in volumes, before making the decision of the strategic investment.
“[van Rossum is an] early adopter and is a key player on the FTX exchange,” Sam Bankman-Fried, co-founder and CEO of Almada, said in a statement. “He has demonstrated an enviable track record and we’re excited to take part in the next big phase of his trading firm’s expansion.”
Meanwhile, launched last May, FTX is already competition to major crypto derivatives platform operating for years. With backing from Binance, the exchange is eying at a billion-dollar valuation with the ongoing public sale of its token.
