The CFTC has urged more examination of the proposal because it could lead to a monopoly of big companies. FTX has attempted to integrate brokerage services internally to perform trades automatically.
Goldman Sachs, one of the world’s most prestigious investment firms, is apparently attempting to integrate some of its derivatives products into the FTX.US crypto derivatives marketplace.
According to Barron, Goldman Sachs has been in talks with FTX about regulatory and public listing assistance and plans to expand into crypto derivatives by utilizing some of its own derivatives tools and services.
FTX.US, the US arm of global cryptocurrency exchange FTX, is looking to expand its derivatives products by adding brokerage services. Instead of relying on “futures commission merchants,” the crypto exchange would be able to handle the collateral and margin needs internally (FCMs). Brett Harrison, president of FTX.US, said:
“We already have a number of FCMs committed to technology integration with the exchange.” You’re undoubtedly aware of a couple of significant ones.“
The US Commodity Futures Trading Commission (CFTC) has solicited public opinions on the crypto exchange’s suggested revision. The chief regulatory authority also believes that FTX’s proposal should be scrutinized because it would give giant investment banks like Goldman Sachs a monopoly.
The integration of Goldman Sachs derivatives services would provide “trading futures directly, introducing clients and acting as an on-ramp to the exchange, or providing capital top-ups for clients,” according to people familiar with the situation.
An integrated brokerage model, according to FTX, would help to make the market more stable and free. CEO Sam Bankman-Fried faced multiple concerns about crypto derivatives and FTX’s proposal to integrate its own FCM during a recent roundtable session with the CFTC.
For a long time, crypto derivatives trading has been a source of controversy, with many European countries including the United States forbidding most crypto exchanges from enabling leveraged trading. Following regulatory action, Binance had to shut down its derivatives sales in numerous European nations.
Also Read: Goldman Sachs Trades a Bitcoin Non-Deliverable Option in the Bank’s First OTC Crypto Transaction
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