Goldman Sachs Seeks to Partner with FTX.US to Offer Crypto Derivatives
KEY POINTS
- Goldman Sachs is said to be in talks with FTX.US to offer crypto derivatives on the platform.
- A partnership between Goldman Sachs and a major crypto exchange like FTX could have big rewards for both partners.
- FTX believes that having an integrated brokerage with a company like Goldman Sachs would give the crypto market increased stability.
What long-term effects could this have on the market?
In today's cryptocurrency news, one of the largest investment banks in the U.S., Goldman Sachs, is reportedly in talks with FTX.US to offer crypto derivatives on the platform. A collaboration of this kind would serve to boost the efficiency of FTX's U.S. platform by allowing Goldman Sachs' tools and services to handle much of the processing work. The opportunities afforded to FTX through a partnership of this caliber could be immense, giving Goldman Sachs the ability to orchestrate new cryptocurrency commitments from big clients who already trust the brokerage.
Struggles facing the partnership
With Goldman Sachs teaming up with FTX's U.S. subsidiary for regulatory and public listing help, the Commodity Futures Trading Commission, or CFTC, has shown concern regarding this partnership. This regulatory organization believes that a collaboration of this kind could result in an unfair monopoly for companies like Goldman Sachs. Goldman Sachs and FTX both stand to gain from this partnership, but it may be stopped before it gets off the ground should the CFTC deem it to be an unfair advantage. If this partnership does occur, however, the crypto market could be greatly impacted.
Effects on the rest of the market
By acquiring an integrated brokerage, FTX.US would gain a major edge over other exchanges, becoming one of the best places for investing in cryptocurrency. Via Goldman Sachs, FTX.US would be able to offer trades on cryptocurrency futures directly, and would therefore become a recommended exchange from one of the country's biggest banks. If this collaboration goes forward, other exchanges would likely seek out brokerage integrations of their own.
Soon enough, any exchanges that do not have integrated brokerages could be old hat if this partnership sees success. FTX's leadership has expressed their beliefs that brokerage integration would serve to make the crypto market more stable. This would be a major change, as the cryptocurrency market is notoriously volatile in its current state, with values lurching and falling drastically from moment to moment. Goldman Sachs and FTX.US could change the game for the crypto market, but will this move be blocked by bureaucracy?
The bottom line
FTX.US and Goldman Sachs are said to be in talks to team up, providing increased value for each other by using each other's tools and services. This agreement could result in major leaps for both enterprises, but the possibility has caused concern among major regulatory bodies. If Goldman and FTX can get their proposal past the CFTC, then these two organizations stand to see big benefits from each other.
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Our Research Expert
Katie Clinebell is a freelance content creator and digital marketing strategist for FinTech, blockchain, and crypto brands. She has created award-winning campaigns for Snapple and Tai Pei Frozen Asian Food and received an Adobe Academic Achievement Award for content about Olympic athletes.
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