The CEO stated that bringing crypto derivatives to U.S traders was “the single most important request of our customers as far as I can recall.”
In the same year that he spent hundreds of millions on struggling crypto lenders, and had his image plastered all over billboards, FTX CEO Sam Bankman Fried still claims LedgerX-now renamed FTX USA Derivatives-he still commands most of his attention.
In October 2021, Ledger Holding, which is the parent company to CFTC-licensed LedgerX was purchased by the crypto exchange. The undisclosed sum was paid. The company acquired Ledger Holding, the parent company of CFTC-licensed LedgerX in October 2021. This acquisition provided a platform that would make Bitcoin and Ethereum derivatives accessible to U.S. customers.
“I think that was one the most important things we did and that it had super high upside. It remains probably the single thing I’m paying attention to right now,” Bankman Fried said in the latest episode Decrypt’s podcast. It’s important for our company and the future of the ecosystem that we have the same market access and liquidity in the United States as people internationally.
A derivative is an agreement to purchase or sell an asset on the basis of future prices. The U.S. Securities and Exchange Commission continues to debate which crypto assets are securities. However, the CFTC allows several companies–both crypto natives and traditional finance stalwarts — to offer crypto derivatives for traders.
Bankman-Fried tweeted the announcement last August that it was ” one the most exciting announcements ever.” In December , he spoke to Decrypt and stated that he was still focused on increasing derivatives trading for FTX customers in the U.S. He said that “it’s been the biggest request of our customers for as long as I can recall.”
FTX was founded in 2019 as a derivatives exchange. It then expanded its offerings to include NFTs and credit and debit cards, payment processing and over-the counter trading. FTX, like Binance, had to create a separate company called FTX US to serve its U.S. clients.
This has meant that the licenses required to offer more of its product line in the U.S. have been obtained. FTX is not the only company that seeks CFTC licenses through acquisitions.
Coinbase launched Nano Bitcoin Futures in June on its Coinbase Derivatives Exchange. (Previously known as FairX, before Coinbase bought it). It is a half-step to offer derivatives directly through its app. The Coinbase BIT futures won’t be available until Coinbase has its futures merchant license approved.
Crypto.com spent $216 million last year to purchase the North American Derivatives Exchange and Small Exchange from IG Group. The acquisition was made to allow Crypto.com customers in the United States to access derivatives products. However, the United States is currently not listed on the company’s derivatives trade geo-restrictions.