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Blog|News|Goldman Sachs, a renowned U.S. financial firm, apparently wants to add certain derivatives to FTX.US crypto derivatives
Published June 1, 2022|1 min read

Goldman Sachs, a renowned U.S. financial firm, apparently wants to add certain derivatives to FTX.US crypto derivatives

Barron's claimed that Goldman Sachs is in negotiations with FTX about regulatory and public listing assistance, and intends to extend its sale of crypto derivatives by utilising its existing derivatives tools and services.

The U.S. Commodity Futures Trading Commission (CFTC) has invited public feedback on the crypto exchange's proposed revision. As it would lead to a monopoly by giant investment banks such as Goldman, the primary regulatory body considers that FTX's plan merits further examination.

FTX.US, the U.S. arm of the worldwide cryptocurrency exchange FTX, is seeking brokerage services for its derivatives offers. This would enable the cryptocurrency exchange to manage collateral and margin needs internally, rather than relying on "futures commission merchants" (FCMs). FTX.US president Brett Harrison said:

We have multiple FCMs already committed to integrating technologically with the exchange. There are several large ones you can probably name.

According to individuals with knowledge of the situation, the integration of Goldman Sachs derivatives services would include "direct futures trading, introducing customers and serving as an on-ramp to the exchange, and providing capital top-offs to clients."

FTX has stated that an integrated brokerage model would aid in stabilising and liberating the market. In a recent roundtable session with the CFTC, CEO Sam Bankman-Fried faced several concerns about crypto derivatives and FTX's plan to integrate its own FCM.

Crypto derivatives trading has been a matter of dispute for quite some time, with several European nations and even the United States outlawing leveraged trading on the majority of crypto exchanges. As a result of regulatory interference, Binance had to cease providing derivatives in a number of European nations.

On the one hand, the CFTC has demanded a closer examination of FTX's modification claim. On the other hand, FTX claims that an integrated brokerage model would enable them to compute margin needs every 30 seconds, as opposed to waiting until the next day to liquidate holdings.