Cryptocurrency Platform FTX Expands to US Stock Market

Sam Bankman-Fried’s cryptocurrency exchange FTX signaled its determination to expand “across all asset classes” by launching a US stock trading service that will accept payments in some stablecoins as well as US dollars.

The Bahamas-based US arm of FTX set the stage for the move by quietly buying a regulated broker-dealer last year. As of Thursday, he said “select American customers” chosen from a Waiting list established in February you will be able to use FTX US to buy stocks and exchange-traded funds, as well as digital assets.

The expansion underscores the scope of Bankman-Fried’s ambitions and its willingness to enter financial services that are more strictly regulated than the crypto markets where the 30-year-old FTX founder has made billions.

“Our goal is to offer a holistic investment service for our clients across all asset classes,” said Brett Harrison, President of FTX US.

“We would like to become the ‘everything exchange’ and ‘everything app’ when it comes to financial services and fintech in general,” added Harrison. “We are using the lessons learned in crypto to enhance and in some cases disrupt the traditional market structure.”

The announcement came just days after it was revealed that Bankman-Fried had paid $648 million for a 7.6% stake in Robinhood, an online retail brokerage firm that also deals in stocks and cryptocurrencies. He said in a filing that he bought the shares because they were an “attractive investment” and that he had no intention of “influencing control” of the broker.

Harrison said that FTX could be seen as a competitor to Robinhood, as it spent “a lot of time” studying its business model to “see if there are elements to emulate or improve.”

For now, FTX Stocks, as the new offering is known, will not charge fees or commissions and will not accept payments for your order flow, as Robinhood does. Asked how the operation would make money, Harrison said: “It’s not an essential part of our business that this is profitable from day one.” He said that could change, depending on how the service is received.

To distinguish itself, FTX US said it would accept payments for share purchases in “fiat-based stablecoins,” including USD Coin and Binance USD. This would exclude so-called algorithmic stablecoins like TerraUSD. Per his rules, Harrison said that FTX would also not accept well-known stablecoins as tethers for these payments.

FTX said it was offering the securities trading service through its broker-dealer, now called FTX Capital Markets, in partnership with Embed Clearing, a provider of “white label” brokerage services for brokers.

The foray into FTX stock comes as it seeks permission from the Commodity Futures Trading Commission, a US derivatives regulator, to bring its brand of automated risk management to the leveraged futures industry, using computers to perform functions now entrusted to brokers.

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