The story of FTX is, so far, a short but impressive one. As Brett Harrison tells it, the spot cryptocurrency exchange started only about a year ago. Now FTX does about $400 million in spot volume per day “and growing.” That’s after increasing the company’s user base by 50% in the last quarter.
But in an interview with John Lothian News at FIA Expo 2021, Harrison, the president of FTX, focused on the company’s larger ambitions. He noted that FTX recently acquired CFTC-regulated LedgerX, a clearinghouse and derivatives clearing organization (DCO), that it rebranded as FTX US Derivatives.The platform opens the door for FTX to offer crypto derivatives — futures and options — to its U.S. customers, he said.
“FTX was originally built to be an institutional-grade platform, “ Harrison said. It was mainly built for high-frequency firms, hedge funds and professional traders who were looking for an advanced system that they could rely on for technology, uptime and low fees.
He said the FTX volume base remains largely institutional — about 70% institutional and 30% retail — but he added that the company is going after the huge retail base in the United States and internationally, “who are looking for a platform they can trust and go trade on.” For example, FTX is eyeing Coinbase’s 50 million users who Harrison said are paying seven times the fees that they would using the FTX platform.
Given its fast-growth ambitions, FTX has devised a novel way to reach a mass audience — by partnering with Major League Baseball. “We wanted to figure out how to reach all of these users,” Harrison said, “and let them know we are a trusted brand.”
“”What we really wanted to do is make a big splash, and with a few very high-profile assets, be able to quickly reach hundreds of millions of people,” he said, adding there was “something really special about having your name on a stadium.”
“There are very few things besides sports that are so ubiquitous,” Harrison said.
Turning to the subject of regulatory hurdles, Harrison said FTX hopes to get CFTC approval to trade either cash or physically settled bitcoin/ethereum futures as well as options. He said the company is working on getting the agency to allow the addition of margins to the LedgerX clearinghouse to make it easier for investors to trade.
While FTX’s first priority is cryptocurrency, there is no reason why FTX should not expand into other derivatives markets in the future, he said.