Nuisance license – The FTX cryptocurrency exchange form a strategic partnership with Goldman Sachs. This collaboration will ultimately allow the crypto platform to compete with derivative intermediaries in traditional finance. This scenario cannot be ruled out, because of the stock market projects beyond the boundaries of the cryptosphere.
FCM license soon available for FTX thanks to Goldman Sachs?
Goldman Sachs will talk to FTX about the integration of trading services in crypto derivatives. Goldman Sachs US President Brett Harrison said the company has “many FCMs that have already been able to integrate exchange technology.”
FCM or futures commission agents are intermediaries authorized to sell futures contracts or options on them.
This FTX integration concerns:
- direct sales of futures contracts;
- customer aggregation;
- the possible construction of an on-ramp to FTX for Goldman Sachs;
- offers stock options to clients.
For FTX, such a partnership may allow it to obtain a license renewal from the CFTC. It is allowed to act as a cryptocurrency exchange and derivatives brokers.
The role of commission agent in derivatives is now provided by financial institutions such as Goldman Sachs.
With such a license, the American giant can do without intermediaries who cannot be part of its privileged partners, but not only …
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The future giant of traditional finance?
This project, which would provide a license from FCM to FTX, was met with opposition from the Futures Industry Association. It represents the intermediaries of the products of origin.
The Association is particularly concerned about that the crypto platform is only expanding beyond the crypto sphere. Thus it will be a strong competitor in the markets for traditional financial sources.
These fears may be fueled by recent actions from cryptocurrency exchanges that show a growing interest in traditional finance.
FTX US announced in a press release dated May 19, 2022, the upcoming launch of FTX Stocks. The latter will offer regulated US stock trading and exchange-traded funds.
FTX Stocks has the particularity of offering its users the possibility to make deposits in USD coin (USDC) on the platform.
Goldman Sachs seems to want to do a joint FTX project at all costs. The bank’s CEO, David Solomon, reportedly met with FTX founder Sam Bankman-Fried in March 2022. They reportedly discussed proposals from Goldman Sachs to support the development of FTX.
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