CryptoPotato
CryptoPotato
  • Crypto News
  • Margin Trading
  • Guides
    • Bitcoin & Crypto Guides 101
    • Bitcoin For Beginners
    • Editorials
  • DeFi & NFT
  • Buy
  • Language
  • Crypto News
  • Bitcoin For Beginners
  • Cryptocurrency Guides 101
  • Editorials
  • Bitcoin & Crypto Margin Trading
  • DeFi & NFT News
  • Bitcoin Price Analysis
  • CryptoPotato Crypto Fund
  • Ethereum (ETH) Price Analysis
  • Ripple (XRP) Price Analysis
  • Market Updates
  • Interviews
  • Buy Bitcoin with Card
  • bitcoin
    BTC$21,455.00
  • ethereum
    ETH$1,230.47
    • Market Updates
    • BTC Analysis
    • ETH Analysis
    • XRP Analysis
    • Interviews
    • Crypto Fund
    CryptoPotato
    CryptoPotato
    • Crypto News
    • Margin Trading
    • Guides
      • Bitcoin & Crypto Guides 101
      • Bitcoin For Beginners
      • Editorials
    • DeFi & NFT
    • Buy
    • Language
    • Crypto News
    • Bitcoin For Beginners
    • Cryptocurrency Guides 101
    • Editorials
    • Bitcoin & Crypto Margin Trading
    • DeFi & NFT News
    • Bitcoin Price Analysis
    • CryptoPotato Crypto Fund
    • Ethereum (ETH) Price Analysis
    • Ripple (XRP) Price Analysis
    • Market Updates
    • Interviews
    • Buy Bitcoin with Card
    Home » Crypto News » Goldman Sachs and FTX in Talks for Ambitious Derivatives Trading Deal: Report

    Goldman Sachs and FTX in Talks for Ambitious Derivatives Trading Deal: Report

    Author: Chayanika Deka

    Last Updated Jun 1, 2022 @ 13:52

    The integration will focus on providing direct futures trading, and introducing clients among other services. 

    Goldman Sachs is reportedly in talks with the US arm of crypto exchange FTX for potential integration of the latter’s derivative operations.

    According to Barron’s report, the multinational investment giant aims to integrate derivatives trading services with FTX US, which has been now pushing into stocks, to enable retail investors to trade a more diverse array of assets at a time when volumes have fallen precipitously.

    Goldman Sachs – FTX

    FTX has been engaged in continuous talks with both – the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) as part of its expansion plans. In fact, Barron’s cited a ‘person familiar with the matter’ that the exchange is eyeing to revamp the license from the CFTC. It will enable FTX to serve as an intermediary for leveraged derivatives trading.

    The exchange’s ambitious roadmap includes managing collateral and margin requirements usually handled by brokerages that act as futures commission merchants (FCMs), including Goldman Sachs. FTX claims the integrated model improves market stability and frees up capital for brokerages operating as FCMs.

    The exchange argued that it holds customer collateral and calculates margin requirements, liquidating positions automatically rather than waiting overnight. These procedures have been tested for handling massive trades and in periods of extreme volatility. The “biggest FCMs” are reportedly warming up to the proposals presented by FTX US, as per the exchange’s President, Brett Harrison, who went on to add,

    ADVERTISEMENT

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

    Goldman Sachs, which happens to be one of the futures commission merchants in talks with FTX, is looking to offer several services, including trading futures directly, rolling out clients and acting as an on-ramp to the exchange, or offering capital top-ups for clients.

    Objections

    FTX US, which currently sits at the valuation of $8 billion, with proper cash flow and abundant capital to back its operations, is fairly confident in its proposal. The CFTC, however, may pose a hindrance. The commodities watchdog had remarked that the exchange’s plans to transform into FCM warrant scrutiny. The proposal also garnered opposition from Congress, which cited potential risks to the brokerage industry.

    Even as Harrison believes that the proposal will benefit FCMs, it is still not clear if the regulatory agencies will give a heads up to Goldman or other Wall Street brokerages, for that matter, to integrate certain trading services with the exchange.

    Besides, the Futures Industry Association, which represents some of Wall Street’s biggest brokers, has warned the CFTC that FTX’s plan, though “innovative” and possibly “transformative,” can bring about significant risks. The trade group has said that it is concerned about the automated system, which can open doors for potential “market manipulation” by threat actors. It also added,

    “This model could exacerbate financial instability in a time of heightened market volatility.”

    SPECIAL OFFER (Sponsored)
    Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).

    PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to receive up to $7,000 on your deposits.

    You Might Also Like:

    • FTXGoldman
      Goldman Sachs, FTX CEOs Met to Discuss Possible Collaborations: Report
    • GoldmanSachs
      Crypto Bloodbath Should Have Little Effect on US Households: Goldman Sachs
    • Goldman_Sachs
      Goldman Sachs to Roll Out OTC Ether Options Trading
    Tags: FTX Exchange Goldman Sachs
    Enjoy reading? Share with your friends
    Facebook Twitter LinkedIn Telegram

    About The Author

    Chayanika Deka
    More posts by this author

    Chayanika has been working as a financial journalist for three years. A graduate in Political Science and Journalism, her interest lies in regulatory implications with a focus on technological evolution in the crypto realm. Contact:Linkedin

  • bitcoin
    BTC$21,455.00
  • ethereum
    ETH$1,230.47
  • Join Our Community

    FacebookTwitter YouTubeTelegram


    Editorials
    Over 33% of NFT Volume is Wash Trading: bitsCrunch CEO Interview

    Over 33% of NFT Volume is Wash Trading: bitsCrunch CEO Interview

    What’s Going on With Celsius Network and Why Is It a Huge Risk for Crypto (Opinion)

    What’s Going on With Celsius Network and Why Is It a Huge Risk for Crypto (Opinion)

    Institutions Are Definitely Here: ConsenSys’ Harriet Browning (Interview)

    Institutions Are Definitely Here: ConsenSys’ Harriet Browning (Interview)

    Binance Visa Card Guide: Read Before You Order

    Binance Visa Card Guide: Read Before You Order

    Bitstamp CEO JB Graftieaux: We Are Still Early (Interview)

    Bitstamp CEO JB Graftieaux: We Are Still Early (Interview)

    Okay Bears NFT Collection: The Complete Guide

    Okay Bears NFT Collection: The Complete Guide

    Our Ambition is to Become the Amazon of Crypto: Interview with Coinbase’s Guillaume Chatain

    Our Ambition is to Become the Amazon of Crypto: Interview with Coinbase’s Guillaume Chatain

    Join Our Newsletter
    Become a CryptoPotato VIP
    One Weekly Email Can Change Your Crypto Life.
    Sign-up FREE to receive our extended weekly market update and coin analysis report
    We NEVER send spam. You can unsubscribe at any time.
    Invalid email address
    Thanks for subscribing!
    About
    Advertise on CryptoPotato
    About Us | Contact Us | Careers

    Terms of service | Privacy Policy | GDPR
    More Sections
    IEO List | Evaluations
    Airdrops
    Scholarship
    Cannabis Stocks News | Market Analysis
    Disclaimer
    Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. Full disclaimer
    © Copyright CryptoPotato 2016 - 2021
    Scroll to top
    One Weekly Email Can Change Your Crypto Life.

    Sign-up FREE to receive our extended weekly market update and coin analysis report

    We never send SPAM. You can unsubscribe at any moment
    Invalid email address
    Thanks for subscribing!