FTX makes a “significant” investment in stock exchange IEX, made famous by Michael Lewis' “Flash Boys”; IEX represented 2.7% of US equities volume in March
Crypto exchange FTX US agreed to take a stake in IEX Group Inc., owner of the stock exchange made famous by …
Context & Ripple Effects
This stake is the next step in FTX's campaign to buy its way into US-regulated markets rather than build licenses from scratch: it acquired derivatives venue LedgerX for its futures and options licenses, then raised $900M at an $18B valuation to fund the expansion. Weeks after the IEX investment, FTX.US shipped zero-commission stock trading in its app, making the sequencing clear.
IEX matters beyond its 2.7% share of US equities volume: it is the exchange built around protecting investors from high-speed traders, the one Michael Lewis' 'Flash Boys' made famous. A crypto-native operator taking a significant stake in it signals that FTX wants credibility and plumbing inside traditional equities, not just a retail app.
First-order effects
- FTX gains a strategic foothold in US equities market infrastructure to sit underneath its new retail stock-trading product, while IEX gets a deep-pocketed backer from outside the traditional exchange club.
Second-order effects
- Traditional brokers and exchanges now face a rival that can bundle crypto, derivatives, and stocks in one app — and per the FT reporting, FTX was simultaneously pushing to replace traditional brokers with automated risk management and 24/7 trading in futures, so the IEX stake extends that model toward equities.
Third-order effects
- The pattern points toward consolidation of crypto and equities trading onto single platforms, eroding the regulatory-era wall between the two markets — though FTX's subsequent collapse, which became one of the costliest Chapter 11 cases in US history, shows how quickly such cross-market stakes can end up as estate assets rather than strategy.
The trend: Crypto exchanges are acquiring stakes in traditional market infrastructure to converge digital-asset and equities trading into unified platforms.