FTX US Derivatives has withdrawn a controversial plan that was under consideration by Washington regulators to overhaul how Bitcoin and Ether futures trade, according to a person familiar with the matter.
(Bloomberg) — FTX US Derivatives has withdrawn a controversial plan that was under consideration by Washington regulators to overhaul how Bitcoin and Ether futures trade, according to a person familiar with the matter.
The US Commodity Futures Trading Commission was weighing the proposal, which had drawn pushback from Wall Street giants.
It would have had the firm execute every aspect of customers’ crypto derivatives trades on its own — thus bypassing other exchanges, banks and financial intermediaries.
The CFTC declined to comment.
FTX US Derivatives, which was previously known as LedgerX, didn’t immediately respond to an emailed request for comment.
The decision to pull the proposal is the latest twist in a days-long collapse of Sam Bankman-Fried’s crypto empire.
More than 130 entities tied to FTX.com, FTX US and trading firm Alameda Research Ltd. were included in a bankruptcy filing on Friday.
The plan was a lightning rod from the start, with many in traditional finance warning the model could be applied to other assets, threatening Wall Street’s stranglehold over lucrative aspects of market plumbing.
The centerpiece of FTX’s proposal was to use algorithms rather than brokers to help clear trades, a crucial process for settling transactions that ensures sellers get their funds and buyers get the assets they’ve purchased.
–With assistance from Annie Massa.
(Updates with details of plan starting in fourth paragraph.)
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