The CFTC hosts a roundtable with FTX CEO Sam Bankman-Fried in attendance to consider a proposal by crypto exchange FTX to disintermediate derivatives trading on its platform.
Although the CFTC considered the company’s proposal, it invited industry leaders and academics to debate the issue in a big room at the agency’s Washington headquarters.
The CFTC roundtable decided to consider direct clearing of FTX’s proposal in April. The decision comes after CFTC extended deadlines for the public comment on a request from FTX.US Derivatives.
Hours into the discussion, Sam Bankman-Fried couldn’t help but criticize those who questioned his exchange’s proposal. By tweeting comments during the discussion, he proved the possible split between the two sides.
“There is some irony in some of the statements made by people attempting to protect those who know massively more than they do about the topic and who understand these products extremely well,” the FTX CEO spoke out.
He also slammed critics of the FTX proposal of speaking ‘condescendingly’ about customer protection, alleging that he understands far more than many of the CFTC’s invited experts.
“I just had to get that off my chest a little bit,” he remarked, emphasizing the importance of consumer protection.
Representatives from exchange operators CME and ICE, Citi, Goldman, FTX, Citadel, JPMorgan and BlackRock also joined the discussion.
The roundtable also had representatives from crypto companies including Coinbase, CoinFund, Eris Clearing and Pantera Capital.
The intricacies of crypto trading hung over the discussion, even if FTX has left the door open to extending this concept to other assets in the future.
Futures commissions merchants, or FCMs, are a vital link in the chain of risk distribution in typical derivatives markets, but FTX’s proposal eliminates them.
Many representatives from the derivatives industry expressed concerns regarding the use of automatic liquidations to respond to real-time market stressors, as written in the proposal.
Meanwhile, FTX has been using this trading structure for many years in other countries and is just attempting to implement it in its US branch.
Bankman-Fried noted “a lot of things that I think are pretty wrong that have been said, and a lot of things that are pretty helpful, and I really appreciate the latter.”
Bankman-Fried further stated that the current proposal does not stop the CFTC from rejecting or scrutinizing future market participants who seek to implement such a framework on new assets.
A day back, the FTX CEO hit headlines when he revealed he could spend up to $1 billion or more in the 2024 elections to stop the republican government comeback. This gigantic amount would make him the biggest-ever political donor in a single election