In the same year in which he spent hundreds of millions to rescue struggling crypto lenders and has his face glued on billboards, FTX CEO Sam Bankman-Fried still says that LedgerX – now renamed FTX US Derivatives – is now also attracts most of his attention.
The crypto exchange finalized the acquisition of Ledger Holding, the parent company of CFTC-licensed LedgerX, in October 2021 for an undisclosed amount. With this, the company gained a platform that could make bitcoin and ethereum derivatives available to its US customers.
“I think it was one of the most important things we did, and it had the super high upside, and it’s probably the only thing I’m paying the most attention to,” Bankman-Fried said. latest episode of decryptThe GM Podcast. “I think it is incredibly important for the future of the ecosystem, and for our company, that we can bring the same level of liquidity and market access to the United States that people have internationally.”
A derivative is a contractual agreement to buy or sell an asset based on future prices. While the U.S. Securities and Exchange Commission continues to wrestle with which crypto assets qualify as securities, the CFTC has allowed several companies—crypto natives and traditional finance giants—to offer crypto derivatives to traders.
After the deal was announced last August, Bankman-Fried tweeted that it was “One of the most exciting announcements everwhen he spoke to decrypt In December, he said he was still laser-focused on FTX’s growing derivatives trading for US-based clients. Even now, he said, “for as long as I can remember, this has been the biggest question our customers have.”
FTX began as a derivatives exchange in 2019 before expanding its offerings to include NFTs, credit and debit cards, payment processing and over-the-counter trading. Like its rival Binance, FTX had to set up a separate company, FTX US, to cater to its US-based clients.
This means that the path to offering its broad product suite in the US includes obtaining the requisite licenses. FTX isn’t the only company that has received a CFTC license through an acquisition.
In June, Coinbase launched NanoBitcoin Futures on its Coinbase derivatives exchange (known as FairX prior to its acquisition of Coinbase). This is a half step of introducing derivatives directly from your app. Coinbase BIT Futures will be available on third party platforms until Coinbase approves its Futures Commission merchant license.
Last year, Crypto.com paid $216 million to acquire North American Derivatives Exchange (Nadex) and Small Exchange from IG Group. It was intended to give US clients of Singapore-based Crypto.com access to derivatives products, but for now the United States is still listed on the company’s derivatives trading geo-restrictions list.