Goldman Sachs And FTX Sets To Form A partnership
According to the report, Goldman Sachs and other Wall Street banks plan to collaborate with the crypto firm, FTX. Their collaboration is aimed at integrating leveraged trading services offered by FTX into their system. As well as adding brokerage services offered by Goldman Sachs bank into FTX’s functionality.
News confirmed that Goldman Sachs and FTX have been meeting over their potential partnership for a while now. Recently, David Solomon and Sam Bankman-Fried, the CEO of Goldman and FTX respectively, had a private discussion. According to the report, the discussion was about a feasible IPO, crypto trade marketing, and the regulation of FTX.
Currently, Goldman Sachs is one of the biggest and top leading investment banks in the world. The bank had recently announced its plans to start offering derivative trading activities to its customers. It further explained that in order to achieve its aim, it is set to partner with FTX. More so, the crypto firm would include some brokerage services into its activities.
FTX has been planning to offer both crypto and non-crypto financial assets via its platform for a while now. To achieve this, it has been meeting with government regulatory bodies like the CFTC and the SEC for some time now. FTX is a popular crypto exchange based in the United States.
The crypto firm also plans to start handling collateral and margin transactions which are the services of a brokerage firm. It added that its potential partnership with Goldman bank will enhance market stability. More so, the collaboration would help brokerages acting as futures commission merchants to free up capital.
The exchange’s spokesman claimed that they hold client collateral, evaluate margin criteria and also execute automated position liquidation instead of waiting overnight. The processes are capable of executing huge trades in high volatile periods.
Several Regulatory Bodies Rejects FTX’s Proposal
The CFTC regulatory body is yet to approve FTX’s appeal to take the role of a FCM. It considers it a proposal that needs thorough investigation.
However, the United States Congress has outrightly rejected the proposal. The panel claimed that the proposed plan is capable of putting the brokerage industry at risk.
Therefore, the success of the potential collaboration between Goldman Sachs and FTX is yet uncertain. This is because regulators might oppose the idea of the brokerage firm, (Goldman) and the crypto exchange (FTX), integrating their features.
In addition, the Future Industry Association FIA have shown their rigid disapproval towards the proposed integration. They claimed that it may worsen the state of finances and market volatility.