Goldman Sachs joins hands with FTX to integrate derivatives trading 

American multinational investment bank and financial services company Goldman Sachs is reportedly joining hands with the US branch of the crypto exchange giant FTX to possibly integrate the exchange’s several derivatives operations.

As per a recent report, Goldman Sachs is aiming to solidify its position in the crypto sector by integrating derivatives trading services with FTX US to offer retail investors a wider set of assets to trade. Notably, the latter is now entering into stocks.

As part of its expansion plans, FTX has been in constant contact with both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). According to reports, the exchange is looking to update its CFTC license, allowing it to act as a middleman in the trading of leveraged derivatives.

FTX US grabs Goldman Sachs as its FCM

The exchange’s ambitious plan involves handling collateral and margin requirements, which are typically handled by futures commission merchants (FCMs), such as Goldman Sachs. The integrated model, according to FTX, promotes market stability and frees up cash for brokerages that act as FCMs.

The exchange said that instead of waiting overnight, it keeps customer collateral and calculates margin requirements, automatically liquidating positions. These techniques have been put to the test in order to handle large trades and periods of high volatility.

Notably, FTX US is now valued at $8 billion and has sufficient cash flow and resources to support its operations. It also has plans to hire software developers to achieve its goal over its Blockchain and Gaming unit.

According to its President, Brett Harrison, some of the largest FCMs are warming up to the ideas provided by FTX US. Interestingly, one of the FCMs in talks with FTX is Goldman Sachs, which wants to provide a variety of services, including trading futures directly, bringing clients and acting as an on-ramp to the exchange, and providing capital top-ups for clients.

Harrison states:

“We have multiple FCMs already committed to integrating technologically with the exchange. There are several large ones you can probably name.”

This is not the first time the two firms have collaborated. As TheCoinRise reported in April this year, Goldman Sachs has reportedly partnered with FTX for regulatory help.